The January 27, 2010, issue of the Wall Street Journal contains an article by Timothy Aeppel entitled “‘Bullwhip’ Hits Firms as Growth Snaps Back.”

Instructions Read the article and answer the following questions.

(a) Explain why Caterpillar would more than double its purchases of steel this year even if its own sales don’t rise relative to the previous year.

(b) Why did Caterpillar meet with its key suppliers during the previous year?

(c) What are some of the barriers and concerns that suppliers faced at the time of the article?

(d) How rapidly did Caterpillar grow in recent years and what did it learn from that experience, that is, what changes did it implement with regard to suppliers?

INTERPRETING FINANCIAL STATEMENTS