Reference no: EM132250709

Professor David Ehrlich, Marymount University Background Information Joanna Stores is a 500-store women's apparel chain that emphasizes popular prized goods. Its vendor policies tend to be somewhat lax, and vendors have often been known to take advantage of the company, shipping merchandise late and getting away with it. However, this fall season began badly. Sales were flat, and the dress department's inventory was higher than normal. As the end of August approached buyer Karen Clark was checking her open-order file and found that a very large order from Marie Modes, consisting of some 20,000 units, had not yet come in. She called Marie to find out when the goods would be ready, and was told that the dresses might be a couple of days later than the August 30 cancellation date on the order. Hearing this, she asked for Martin Craft, the sales manager, and informed him that the store would not accept the order if it did not arrive before August 30. Craft's reaction was equivocal "I'll be late with a couple of styles but will have 80 percent of the order in your place on September 2. I've got a huge investment in fabric and labor in this order, and I'm going to ship it" Clark immediately sent off a cancellation notice, insisting on August 30. Craft responded by saying, "I'm still a few pieces short, and I'm shipping what I've got, cancellation or no cancellation." And sure enough, 18,000 dresses from Marie arrived at Joanna's door on September 2. And just as sure, Joanna refused the entire delivery. The dresses remained on the truck. When Craft heard this, he was furious. “what am I supposed to do with these goods, eat it? You wrote us an order, we delivered it within the grace period, and you're gonna keep them. Either that or I'll see you in court." Clark replied, "You do that, and we'll never do business again. You knew perfectly well when that order was due. If you were going to have difficulty filling it, you should have let me know a long time before this. You know we're a big outlet for you. You need us, so you'll get rid of this stuff. And I promise I'll write you a nice big order next season." Discussion Questions 1. As an observer of this situation, what do you think should have been done? 2. What would you advise the two principals to do to resolve the situation?