Question

An international paint manufacturing company is operating in Faisalabad, Pakistan. The
company procures titanium dioxide and chrome oxide from a local supplier for producing
paints. Due to recent delayed shipments of these materials the management has decided to
sever ties with existing supplier. The total value of the business is estimated at Rs 210
million. Management has gathered relevant information about the suppliers from trade
journals and catalogues. Six potential suppliers were identified that can provide the
required raw materials.
a. How many out-suppliers exist in the market?
b. Identify the buying situation and justify your answer

Answer 1

Answer a. According to the question there are six out-suppliers in the market

Answer b. Buying situation in the given case is Straight Rebuy.

Justification: in this buying situation, organization place order for raw materials and daily office supplies. In the given case, international paint manufacturing company wants to buy titanium dioxide and chrome oxide for producing paints. These are the raw materials which the company wants to buy from the suppliers. Hence, this case is an example of STRAIGHT REBUY.

we cannot consider it as modern rebuy because on modern rebuy, the raw materials changes along with change on suppliers. So in the given case, although there is change is suppliers but there isn't change in raw materials. Hence we cannot consider this situation as an example of modern rebuy.