As a director of purchasing for a firm that manufactures


As a director of purchasing for a firm that manufactures motorcycles, you have been notified that the price of an important part used in the manufacture of the bikes has nearly doubled. You see your company having three choices:

(1) buying the part and passing the cost on to the customer by increasing your price;

(2) buying the part and absorbing the increase in cost, keeping the price of your bikes the same; and

(3) buying a lower-priced part that will be of lower quality.

Prepare a list of pros and cons for each alternative. Then explain your recommendation and justification for it.

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Marketing Management: As a director of purchasing for a firm that manufactures
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