NEGOTIATION between the technical manager of Apex Co and a representative of an American firm Senstech Inc

David: The reason for our meeting today, as I mentioned in my letter, is the need for our company to subcontract the production of sensors or detectors for our Apex alarm systems. At the beginning, we thought of producing them ourselves, but we have decided to concentrate all our efforts on the master unit of the alarm system itself. We have approached your company because your detectors correspond exactly to our technical specifications.

Jeffrey: Well, I'm glad you're considering doing business with us. But before we go any further, I'd like to ask just one question. What type of detector do you have in mind? As you probably realised when looking at our catalogue we have a wide variety of sensors .

David: In fact, we are more particularly interested in your infrared and movement detectors.

Jeffrey: I see. And what quantity do you intend to order?

David: We could start with an order of 1000 a month and gradually move up to 2000. Would that be possible? As you can imagine, since it is a big order, we would appreciate a substantial discount on your usual price.

Jeffrey: Well......To be frank with you, this sudden big order puts us in a difficult situation. You see, we would need to step up our production significantly since we currently produce only 5OO detectors a month. We would therefore like to know for how long you envisage placing such large orders.

David: I understand. Well, I think we could reasonably expect it to be over a period of one year.

Jeffrey: In that case, we could make an effort and offer you a 15% reduction on the usual price. Would that satisfy you?

David: I am afraid, to be frank with you, we were expecting something more in the order of 30% .

Jeffrey: Well, as I said before, producing such big quantities would require a change in production methods. What I mean is that we would need to buy new machines and hire more personnel. If you were ready to guarantee such a regular order over a period of at least 3 years, we could offer a discount of up to 30%

David: I understand your situation but I'm afraid it would be difficult to agree to a 3-year period. Let me explain! It is impossible for us to guarantee that the quantity and the model will be the same next year. It all depends on the evolution of the market. We can however promise to order a minimum number of detectors over the next 2 or 3 years. But you will understand that we will need some kind of flexibility.

Jeffrey: I see what you mean. In that case, for a minimum of 1000 detectors a month over a period of 3 years whatever the model, we could go as far as 25% How's that?

David: Yes, that arrangement would be quite satisfactory.
Well then, let us now talk about transport and guarantee. As I mentioned in my letter, we have very special requirements concerning deadlines .....FADE OUT
Last modified: lundi, 15 juillet 2013, 12:52