Reference no: EM132542065

Point 1: Rebecca is the purchasing agent for the Hanover Manufacturing Company. Cindy is the head of production planning and control department. Every six months, Cindy gives Rebecca a general purchasing program. Rebecca gets specifications from the engineering department. She then selects suppliers and negotiates prices.

Point 2: When she took this job, Rebecca was informed very clearly that she bore responsibility for meeting the general purchasing program once she accepted it from Cindy. During Week #24 Rebecca was advised that Part #1234 - a critical part - would be needed for assembly on Tuesday morning, Week #32. This was a slight change to the initial purchasing program. She found that the regular supplier could not deliver. She called around and finally found a out-of-province supplier, and accepted a commitment.

Point 3: She followed up by e-mail, and got delivery assurance. On the Thursday of Week #31 she checked by phone and was informed the shipment had left on time. Tuesday morning came on the shipment had not been delivered. Inquiry revealed that the shipment had been misdirected by the railroad company and would be another three days, leaving many full-time staff with nothing to do resulting in lost sales.

Question 1: What department should bear the costs incurred for the idle time and lost sales? Why? As purchasing agent, do you feel it is fair that such costs be charged to your department? If you are in the sales department and are paid commission, what do you say and to whom?