Cumberland Metal Industries

. Precontract Negotiations: CMI was a $5 one million million million dollar company and knew they would feature to borrow money in read to meet the cater for two Alpha and of import. Therefore, they borrowed $3.2 million from the bank in order to finance their production facility with the car companies as backers. important indemnity for CMI was for $6 million for non-recoverable be. Alpha indemnity for CMI was for $1.5 million for non-recoverable costs. Tooling, curingup and facility costs for CMI was $2.3 million. Pricing consisted of 3 costs for 3 different parts. CMI first had to educate Purchasing in the car companies that the Slip Seal was not a good item. Purchasing had no experience with this item. As a result, CMI invented the L Formula, based on the Purchasing agents name who would give the determine estimates to CMI based on elements of cost and renegotiated in their favor. CMI established the set volumes with both Alpha and Beta, but stipulated that any change of +/- 10% would necessitate price change. Prices for metals during this period were unstable. Beta was using the dogshit wire which was a lot more expensive than the upright slide wire that Alpha was using. In 1975, CMI and Beta switched to spotless steal wire and saved $12.70 per pound on wire. ($15 per pound $2.30 per pound).

2. In 1973 and 1974, there were shortages of sloven-flashed nickel and stainless steel. The prices of both metals were unstable. CMI had quoted Beta a price of $10 per pound for copper wire, but it had risen to $15 by August of that year. As a result, CMI went back to Beta and gave a quote with padding in order so that they would not have to take the full cost if copper wire continued to rise. Beta responded with anger that they thought CMI was trying to pull a strong one. In 1976, CMI re opened its automotive plant since the quoin was ending. Beta changed over from copper wire to stainless steal wire which lowered their raw material cost.... If you want to bunk a full essay, order it on our website: Orderessay

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