Complete the selected case study analysis questions by elaborating
on the questions provided with the case and link together course concepts with
an opening statement and a conclusion that drives home your main points. Case study attached. Questions needed to be answered are as follows:1.Suggest steps Brandt should follow
to begin the EDP process.2.Identify differences between
traditional purchasing and use of e-auctions. How can Brandt use these differences
to make his selection? What types of items would be best suited for purchase
through e-auctions?3.Assume Brandt has identified
products to purchase through e-auctions. What steps does he need to take to
conduct a successful e-auction?4. What negative impact can e-auctions have on supplier relationships, and how can Brandt ensure that they do not occur?
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Case Study Snedeker Global Cruises
It was August 7th, and Brandt Womack had just been given his first assignment by his
purchasing manager at Miami-based Snedeker Global Cruises Inc. It was the “EAuction Development Program” (EDP). The purpose of EDP was to identify potential
products that could be purchased through e-auctions, determine the necessary steps to
conduct a successful e-auction, and assess the impact of e-auctions on supplier
relationships. As a newly hired supply chain manager, Brandt wondered how to
Snedeker Global Cruises incorporated in 1986 and is a cruise company with 35 cruise
ships and over 70,000 berths. Snedeker Global serves the contemporary and premium
segments of the cruise vacation industry and offers a variety of itineraries to
destinations worldwide, including Alaska, Asia, Australia, the Caribbean, Europe,
Hawaii, Latin America, and New Zealand.
In 2005, Snedeker incurred its highest-ever procurement costs in sourcing the products
and services needed for cruise ship operations and wanted to combat this trend. To that
end Snedeker had been working on changing its buying practices. In the past, each
individual cruise ship made all its own purchases for the upcoming season. Purchasing
was decentralized, with each ship making purchasing decisions based on its needs
alone. The company began moving away from this practice and put into place a
centralized purchasing department in charge of making purchases for the entire cruise
line. The centralized purchasing strategy provided many cost-saving opportunities for
the company and greatly reduced the overall order costs of the company. The company
wanted to continue to pursue ways in which the centralized purchasing practice could
reduce costs, and e-auctions became a viable option. However, senior management at
Snedeker was concerned about the impact on quality and the effect e-auctions might
have on suppliers.
At Snedeker, the purchasing cycle began with a master forecast for the upcoming year
with orders being placed 8 to 10 months prior to need. This master forecast included
everything from replacement engine parts to chocolate mints placed on pillows in
cabins. When the forecast was generated it was given to the Senior Purchasing
Manager, Kasey Davis. Kasey scheduled a meeting with Brandt to discuss the EAuction Development Program, giving Brandt the master list of all the products needing
to be purchased for the next year. Kasey instructed Brandt to determine which products
would be best to purchase through e-auctions and wanted to know how the e-auction
process would work. In addition, Kasey wanted Brandt to determine the effect that eauctions would have on relationships with current suppliers.
Brandt walked out of Kasey’s office overwhelmed. It was his first assignment, and he
did not know where to begin the E-Auction Development Program (EDP).
1. Suggest steps Brandt should follow to begin the EDP process.
2. Identify differences between traditional purchasing and use of e-auctions. How can
Brandt use these differences to make his selection? What types of items would be best
suited for purchase through e-auctions?
3. Assume Brandt has identified products to purchase through e-auctions. What steps
does he need to take to conduct a successful e-auction?
4. What negative impact can e-auctions have on supplier relationships, and how can
Brandt ensure that they do not occur?
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