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Ashford BUS 689 Week 2 Discussion

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Ashford BUS 689 Week 2 Discussion

Suppose that a company has a 10-year agreement with a supplier to provide a part that is critical to the production of the company’s best-selling product. The contract is due to expire in 4 months.

This week the senior manager learned that one of the supplier’s competitors has developed a comparable part of equal quality using new technology that reduces the cost by 30%. The manager must decide whether to renew the contract with the current supplier and what the term of the contract should be if it is renewed.

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How would knowledge about the competitor’s price affect the manager’s decision about the optimal contract length with their current supplier? If you were making the decision what would you do about renewing the agreement with the current supplier? Respond to at least two of your classmates’ postings.