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Southeastern University Case Study

1709 words - 7 pages

Heather Sloman, buyer in the purchasing department of southeastern University, was preparing for a meeting with her boss, Glen Meredith, for later that day. Two days earlier, on April 6th, Glen had received a phone call from Walter Charbonneau, manager of the university registrar’s office. Heather was surprised to learn from Glen that Walter had just bought a new piece of equipment for his department without following standard university purchasing policies. Glen asked Heather to look into the situation and get back to him with recommendation.

Purchasing Department

Southeastern University was one of the largest universities in the state, with total enrolment of more than 25,000 ...view middle of the document...

Although the purchase requisition form provided an opportunity for the individual placing the requisition to identify the preferred supplier, policy was to solicit at least two written quotations for purchased in excess of $7,500 and a minimum of three quotations for purchases in excess of $15,000. One of the buyers would prepare a request for quotation form (RFQ) and contacted approved suppliers. The RFQ form specified details, such as product or service description, quantities, FOB point, and terms of payment. Recent government legislation required that any RFQs in excess of $100,000 had to be posted on the Internet. After all bids were received and evaluated, the buyer would select the supplier and issue a purchase order.
The purchasing department maintained a list of approximately 1,200 approved suppliers, which was adjusted every three to five years. The selection criteria for becoming an approved vendor were based on the following weighted average evaluation system:

· Price, 50%
· Compliance with specifications, 25%
· Service, 20%
· Partnership, 5%

The purchasing department has three buying groups and each group handled approximately 20 requests each day. In addition, approximately 250 contracts were rebid each year for ongoing purchases such as snow removal services and photocopier supplies. The total dollar volume of purchases amounted to $75 million of goods and services each year.
According to Heather Sloman, the main objective of purchasing department was to achieve the greatest cost savings. She commented on the role of purchasing at the university: “Our training in purchasing allows us to negotiate the best deals for the university and help avoid wasting university money.”
Although it was university policy that approval from the purchasing department was required before commitments could be made to suppliers, it was not unusual that university personnel contracted suppliers directly. Every year there were about 275 cases where contract were signed with suppliers without prior approval of purchasing. Heather described what happened in these situations: “Most of the time, the only thing we can do is to call them and ask them to provide the details of the purchase. Usually the purchase has already been made, and there isn’t much else that can be done.”

THE FOLDING MACHINE ISSUE

The office of registrar handled about 160,000 pieces of mail a year. There were four major peaks of mailing each year: fees, admissions, records, and scholarships. As many as 50 to 60 people could be occupied manually stuffing envelopes two days a month. A combination of full time employees and temporary staff were used to perform this activity.
Walter Charbonneau had seen an advertisement in a flyer for an automatic folding machine which could be used to eliminate some of the manual work in dealing with mass mailings. He later contacted a...

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