Assignment:
Read Case3: AMD Construction in the text from Benton, W. C. (2014). Purchasing and supply chain management (3nd ed.). Columbus, OH: McGraw-Hill, and answer the following questions in a three- to four-page paper, excluding the title and reference pages, justifying your conclusions. Your paper should be formatted according to APA style as outlined in the Ashford Writing Center.
Evaluate the negotiations between Tom Reed and Jane Axle. What are your recommendations for Jane Axle as far as the next step in the negotiation process?
Develop a comprehensive quantitative analysis of the negotiations between Jane Axle and Tom Reed. Provide a chart to show financial impacts (see suggestion of format for quantitative analysis of the negotiations below)
Appraise the capital equipment acquisition decision and recommend if Reed should purchase or lease the CAT-1 if he chooses to go with Allen Manufacturing Company.
Suggestion of format for quantitative analysis of the negotiations:
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Current Machine
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CAT-1 machine-purchase
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CAT-1 machine - Lease
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Operating cost (without operators)
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Direct Labor
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Depreciation (straight line) 4 months
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Lease Expense 4 Months
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Interest expense at 8% for 4 months
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Salvage Value after 3 years
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Unexpected Costs
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Totals
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