In a 1998 press release, Boeing Commercial Airplane Group (BCAG) announced that
ID: 1230656 • Letter: I
Question
In a 1998 press release, Boeing Commercial Airplane Group (BCAG) announced that it was signing a 10-year contract with distributor Thyssen Inc. - a distributor of raw aluminum - valued at approximately $300 million. The contract reflects Boeing's effort to reduce costs and production bottlenecks resulting from supply shortages. The contract specifies prices and guarantees quantities of raw aluminum to be delivered to BCAG's suppliers. If you were the production manager at BCAG, how would you justify the long-term nature of the contact with Thyssen Inc.?Explanation / Answer
In a 1998 press release, Boeing Commercial Airplane Group (BCAG) announced that it was signing a 10-year contract with distributor Thyssen Inc. - a distributor of raw aluminum - valued at approximately $300 million. The contract reflects Boeing's effort to reduce costs and production bottlenecks resulting from supply shortages. The contract specifies prices and guarantees quantities of raw aluminum to be delivered to BCAG's suppliers. If you were the production manager at BCAG, how would you justify the long-term nature of the contact with Thyssen Inc.?
A contract permits it to avoid the hold-up problem in the future.
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