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please answer the three questions at the very end in the best of ways possible. You are the purchasing manager for Primo Caf Inc. Primo
please answer the three questions at the very end in the best of ways possible.
You are the purchasing manager for Primo Caf Inc. Primo Caf is a small-shed manufacturer of stylish coffee makers. The company has three distinct coffee makers that it produces. The Bean Boiler The Bean Boller is Primo Caf's most basic model. The main materials used in manufacturing the Bean Boiler are aluminum and plastic. There are lots of suppliers for these materials. At present, Primo Cafe's total cost for producing a Bean Boiler is 613 and the product is competitively priced at 15 per unit. There are lots of other coffee makers that are very similar to the Bean Boiler on the market. Still, sales of the Bean Boiler are very stable. The company reliably sells 1,5001,510 units of this product per month. The Family Man The Family Man is Primo Caf's mid-market offering. Primo Caf manufactures most of the Family Man in-house, but buys the glass pot and the electronics that control the on/off function and the timer. At present, final assembly of the in-house manufactured parts and the purchased sub-components occurs at Primo Caf's facility in Grand Rapids. Total cost for producing a Family Man is currently 632 and each unit is sold for 34.99. The Family Man's sleek, artistic design and range of unique colors helps to distinguish it from a wide selection of similar products offered by competitors. Prices for direct competitors range from 25 to 645 . Sales of the Family Man range from 1,0001,100 units per month. The Caffissiop, The Gaffissioce is Primo Cate's high-end offering. Primo Cafe produces the external casing for the Caftissime, in-house, but buys all of the important sub-components from external suppliers. The most important sub-components for the Gaffissime are the gauges that regulate the temperature and pressure of the water as it is forced through the coffee grounds. The proper working of these gauges ensure that the Caffissime produces a perfect cup of coffee at brewing. The Cafficsime's design is a closely held company secret. The machine has won industry awards both in terms of its coffee making process and its external looks. Currently. the Caffission costs 6375 to produce and sells for 6600 . Because of the relatively high price and unique design, demand for the Caftlssime, is difficult to predict. Over the past year, demand has ranged from 400800 units per month. arco wants you to review the way the company buys several key materials and sub-components. Being old school purchasing manager, Marco is of course entirely focused on price. But you take a more rategic view. - Plastic - Primo Caf uses the same high quality, heat resistant plastic for all of its products. The plastic must have an SPI code of 2 , which means it is made of High-Density Polyethylene (HDPE). HDPE products are very safe and they are known to not transmit any chemicals into foods or drinks. There are numerous suppliers for this type of plastic, although it can be tricky to ensure that suppliers actually adhere to SPI specifications. - Aluminum for the Bean Boiler - Primo Caf buys lots of aluminum for its Bean Boiler units. As Marco likes to say, aluminum is aluminum is aluminum. There are plenty of suppliers for this product and little differentiation on cost and/or quality. - Temperature and Pressure Gauges for the Caffissipeq - These gauges regulate the temperature of the water as it is forced through the coffee grounds. Makers of these gauges are typically bigh techcompanies, with the potential to share innovations. At present, there are only three available suppliers for these gauges in the world. Marco's current approach to managing these suppliers is to have the suppliers bid against each other on short-term contracts to achieve the lowest cost. - Electronics for the Family Man - These electronics control the on/off function and the timer on the Family Man. Currently, the design of the Family Man requires that the electronics be no greater than 6.95cm in diameter. Industry standard for these electronics is 7cm in diameter. Because of this one unique requirement, there is only a single supplier for this component. Using the Kraljic Matrix: (1) Classify each of the key materials and sub-components into one Kraljic's segments (noncritical, strategic, leverage, or bottleneck - note that more than one item can fall into a category) (2) Explain why you classified the item as you did (3) Discuss the specific purchasing strategy you would use for each item. In other words, how would you interact with the supplier(s) of this material to maximize value for Primo Caf Step by Step Solution
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