Since Purchasing Managers Are Evaluated and Rewarded on the Basis

question 35

Essay

Since purchasing managers are evaluated and rewarded on the basis of cost savings generated, why are they often willing to overlook the low-price supplier in favor of a higher-priced supplier that offers superior logistical service? Can they justify this on a cost basis?

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Definitions:

Antitrust Cases

Legal disputes that arise when businesses are accused of practices that limit competition, aiming to protect consumers and ensure a fair marketplace.

Standard Oil

An American oil producing, transporting, refining, and marketing company. Established in 1870 by John D. Rockefeller and partners, it was a predominant integrated oil producing, transporting, refining, and marketing company of its time.

Federal Trade Commission

An independent agency of the United States government aimed at preventing anti-competitive, deceptive, and unfair business practices.

Interstate Commerce

The trade, traffic, or transportation of goods, services, or money across state borders within the United States.