You are a business planner and
accountant. Part of your expertise is in helping prospective business owners
evaluate the various manufacturing and supplier options available based on the
product they manufacture. You have a long history of working with widget
manufacturers, which is why Gloria is meeting with you. Additionally, you are
an expert in global business issues and can help Gloria review foreign supply
options, including the applicable laws, customs regulations, and tax
implications of using a foreign supplier versus a domestic supplier. Gloria has
come to you to get some advice on which supplier will best meet her needs and
Gloria’s business is doing well. She
has been manufacturing widgets in the United States, however, the costs for the
raw materials have increased 200% with her current supplier. She has found a
new U.S. supplier—Greenleaf Manufacturing—that is willing to negotiate costs
with her. Gloria has scheduled an appointment with its CEO, Richard Franklin.
She is also considering manufacturing her widgets overseas. She traveled to
China and met with Jun Chin, who is interested in the contract. She also went
to Brazil and met with Mateo Bonilla, who also discussed production with her.
Currently, Gloria has been selling approximately 12,000,000 widgets per year,
but she recently got a purchase order from a large retailer for 8,000,000
widgets and a guarantee for a minimum of 13,000,000 widgets over the next 24
months. The purchase order states that continued business is dependent on paying
no more than $7.34 per widget. Gloria’s current cost to manufacture widgets is
$6.22 and she has been selling them for $9.18. Doing business with this large
retailer will take Gloria’s business to the next level, but she has to get her
He is the CEO of Greenleaf
Manufacturing, which is a company located in the same state as Gloria’s
business. He has submitted the following proposal to Gloria Smithson: He will
manufacture up to 6,000,000 widgets per year at a cost of $6.37; another
6,000,000 widgets per year at $5.41; and a final 6,000,000 widgets per year at
a cost of $5.01 each. However, Greenleaf’s proposal contains a clause that requires
Gloria’s acceptance by 5:00 p.m. on March 3, 2015.
She is the CEO of Sunrise Ltd. in
Quanzhou, China. Her company has recently begun doing business with American
companies. Ms. Chin is able to manufacture 100% of the widgets Gloria Smithson
needs annually at a cost of $4.01 each.
He operates Groupo Embraco. Groupo
Embarco has never done business with an American company, but like Gloria
Smithson, he wants to expand his business. Presently, it can supply Gloria with
10,000,000 widgets annually at a cost of $3.83. Bonilla is willing to expand
his operations in order to manufacture more widgets.
You are a business planner and
accountant. Gloria has come to you to get some advice on which supplier will
best meet her needs and objectives. Prepare a paper that addresses the
- What elements are necessary for a valid contract to
exist? Define what constitutes a "valid offer." Evaluate
each proposal and discuss whether each of the offers constitutes a valid
offer. Why or why not?
- Each proposal involves a different country. What are
the particular concerns for Gloria in doing business in other countries?
What contract provisions does she need to include in any business contract
in order to protect her business?
- How can Gloria continue to protect herself and her
family from personal liability if she obtains her widgets from a foreign
manufacturer? Use your textbook and library references to answer
these questions. Evaluate each proposal. Does it constitute an offer?
- Your paper should be four to five pages long, exclusive
of the cover page and references page, and it should be double-spaced. It
should comply with APA 6th edition formatting.
- Cover page
- References page
- 12 point, Times New Roman font