The Purchasing Manager at the Indiana facility has been over budget for several months, and the Vice President is not very pleased. The Purchasing Manager has made contact with an international supplier who can get one of the engine controls at a minimal cost, but the quality rating is much lower than what is required by Bridgeway. The Purchasing Manager does not want to be over budget again at the next quarterly meeting and has decided to consider purchasing this lower quality component for the engine controls. There is also a personal monetary reward for ordering parts from this specific international supplier.

While the purchasing manager has been over budget for several months, wanting to get one of the engine controls at minimal cost would hurt the company as the quality rating is much lower than Bridgeway's required. This is not well seen in business because lower quality can affect our customers who would decide to go with another company and the prestige of the same would be affected.

While the purchasing manager would have a personal monetary reward for ordering parts from this international supplier, only he and not the company would benefit. The most logical thing is to review the budget exhaustively with experts in the field and see where you could reduce costs that do not affect the quality of goods or services produced by the company.

Have a nice day!