CAMPBELL KEYBOARD CORPORATION - Essay Example

As a result of the nature of the order, Ingborg proposed two options for the quotation. The first quotation was to be based on the worth of the entire job which Plum Computer was willing and able to pay Campbell Keyboard. This proposal would therefore be in principal, a fraction of the payment made to Campbell Keyboard. Consequently, Smith had to disclose the value of the job to Ingborg so as to come up with a quotation price for the RF transmitter. In my opinion, this proposal meant that Smith would disclose vital information by revealing the worth of the job.

By so doing, Ingborg would have tied the cost of the RF transmitter to the whole value thereby attaining a higher price. Attaching the cost of the RF transmitter to the value of the whole job would not be realistic as the transmitter is being purchased by Campbell Keyboard, thus Ingborg should not be concerned with the contract in place between Campbell Keyboard and Plum Computer. Smith should therefore not agree to this proposal since it not only reveals information on a contract with a client but it is also an expensive option due to it being a percentage of the entire value of the job.

The second proposal from Ingborg was for $33 per hour straight time and $40 for overtime based on the actual hours spent on the job. This proposal is more realistic as the cost is based on the amount of hours that Ingborg put in the production of the RF transmitter. In my opinion, this is the best proposal of the two not only because the cost is based on the work done but also because it would be cheaper than the first proposal in the long run. This option is also better for negotiating on the side of Smith since the cost per hour can be negotiated lower than is stated by Ingborg.

Although it would be difficult to ascertain the exact hours worked by Ingborg, Smith has more leverage in this proposal than the previous one. Are there any other choices open to Smith for arriving at an equitable agreement? Smith can research on the market charges by the other firms and use the average as a basis for negotiating. The market prices for the three other sources could be essential to coming to an agreement. Even though the three other companies were not in a position to handle the order due to time constraints, Smith can still get the cost they would charge on making the RF transmitter and use the average during the negotiation with Ingborg.

By so doing, Ingborg would realize that Smith has knowledge on the on goings in the market thus giving Smith a bit of leverage during negotiations. Another option available to Smith is giving a counter proposal that is based on the cost of producing the RF transmitter that Campbell Keyboard has incurred in the past. Campbell Keyboard also produces RF transmitters but due to the time limitations in place for this new order, it is difficult to manufacture hence the need to outsource the product.

Therefore, in order to come to an equitable agreement, Smith can use the cost of manufacturing the RF transmitter that Campbell Keyboard has incurred in the past and use it as a basis for negotiating with Ingborg. By doing this, a relatively fair price can achieved on the side of Campbell Keyboard and an equitable agreement can be arrived at. How would you have handled the procurement if you were Smith? If I were Smith, I would invite proposals from companies who could make the RF transmitter within the time frame and specifications needed, to bid for