Question
Apple Computer ordered 1 million watches from Supplier A in Shanghai and 1 million watches from Supplier B in Taipei, for delivery by October 15th,
Apple Computer ordered 1 million watches from Supplier A in Shanghai and 1 million watches from Supplier B in Taipei, for delivery by October 15th, for in-store sales during the holiday season.Both Suppliers charged $200 per watch.Supplier A was able to deliver its 1 million watches on time, but Supplier B encountered component problems and notified Apple that it could only deliver 500,000 watches on time.Apple asked Supplier A to operate additional overtime production lines, and Supplier A was able to deliver on time an additional 300,000 watches at $225 each (the $25 per watch increase was mostly due to overtime costs and using air freight instead of ocean vessels to deliver on time).Apple sold out theentire 1.8 million watches it had available at an average retail price of $375, with an average profit of $75 per watch. In light of the reduced inventory, Apple maintained billboard promotions in markets where it had adequate inventory to sell and cancelled $100,000 worth of billboard promotions it had scheduled in markets where it wouldn't have adequate inventory to sell, and incurred $25,000 in cancellation fees and wasted production costs.Discuss what claims Apple can bring against Supplier B and what amount of damages it likely can recover.
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