1. Prepare an analysis to determine whether Sarbec Ltd should:
(a) purchase the required slit steel directly from Jensteel Ltd
(b) purchase the 48-centimetre sheet steel from Jensteel and have it slit by Precut Pty Ltd into 50 output tonnes, 4 centimetres wide and 75 output tonnes, 8 centimetres wide
(c) take advantage of Precut’s reduced slitting rates by purchasing 100 output tonnes of each width. Round all cost figures to the nearest cent.
2. Independent of your answer to requirement 1, present three additional reasons, reflecting qualitative rather than financial information, why Sarbec Ltd may favour the purchase of the slit steel directly from Jensteel Ltd.
3. Independent of your answers to requirements 1 and 2, suppose that Christopher Lane’s final analysis shows that purchasing slit steel directly from Jensteel is Sarbec’s least costly option. Before making his decision, Lane receives a call from a good friend who is the production manager at Precut. His friend has called to urge Lane to use Precut’s services. ‘We’re really hurting here at Precut, Chris’, his friend insists. ‘If we don’t get this job, it’s going to be a long cold winter for some of us.’ Discuss Christopher Lane’s ethical obligations in this matter.