Macrina's Bistro is a publicly owned corporation that owns several restaurants in regions across thecountry. Matthew Patrick is the president of Macrina's Bistro; Lucille Braun is the purchasing agent; andKevin Matthew is the executive assistant. All three have been with Macrina's Bistro for about five years.Mary is Macrina's Bistro's controller, and she been with the company for two years.Matthew: Hi, Mary, come on in. So you say you have a confidential matter to discuss. What's on yourmind?Mary: Matthew, I was reviewing our increased purchases from Sysco last week and wondered why ourvolume has tripled in the past year. When I discussed this with Lucille, she seemed a bit evasive andtried to dismiss the issue by stating that Sysco can give us one-day delivery on our orders.Matthew: Well, Lucille is right. You know we have been trying to implement "just-in-time" purchasingand trying to get our inventory assets down.Mary: We still have to look at the overall cost. Sysco is more of a jobber than a warehouse. Afterinvestigating orders placed with them, I found that only 10 percent are delivered from their warehouseand the other 90 per- cent are drop-shipped from the manufacturers. The average markup by Sysco is 30percent, which amounted to about $500,000 on our orders for the past year. If we had ordered directlyform the manufacturers when Sysco didn't have the item in stock, we could have saved about $450,000($500,000 3 90 percent). In addition, some of the orders were late and incomplete.Matthew: Now look, Mary, we get quick delivery on most items, and who knows how much we aresaving by not having to stock this stuff in advance or worry about it becoming obsolete. Is there anythingelse on your mind?Mary: Well, Matthew, as a matter of fact, there is. I ordered a Dun & Bradstreet credit report on Syscoand discovered that Bruce Templeton is the princi- pal owner. Isn't he your brother-in-law?Matthew: Sure he is. But don't worry about Bruce. He has a Harvard MBA, and he understands this just-in-time philosophy. Besides, he's looking out for our interests.Mary (to herself): This conversation has been enlightening, but it doesn't really respond to my concerns.Can I legally or ethically ignore this apparent conflict of interests?Your task:1. Would Mary be justified in ignoring this situation, particularly since she is not the purchasing agent?2. State the specific steps Mary should follow to resolve this matter.

Just-in-time is an inventory management approach in which companies work closely with suppliers so…

Answered: 1. Would Mary be justified in ignoring…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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1. Would Mary be justified in ignoring this situation, particularly since she is not the purchasing agent? 2. State the specific steps Mary should follow to resolve this matter.