BDA Pharma: Purchasing Dilemma of New Machinery
Sandeep Puri
Asian Institute of Management, Philippines
Rakesh Singh
Institute of Management Technology, Ghaziabad, India
Shraddha Puri
Rotterdam School of Management, Netherlands
Siddharth Ninan Abraham
Delhi University, India
Volume 17: 2022, pp. 299-312; ABSTRACT
In May 2022, the plant head of BDA Pharma initiated a request for INR20 million to buy a new liquid syrup manufacturing machine. After several rounds of negotiations he narrowed the choice of suppliers down to two. Both these suppliers met the required product specifications. After further negotiations with the two suppliers, the plant head lowered the prices of the machines by more than INR1.5 million from earlier quotations. There was a price difference of INR0.5 million between the two suppliers. However, keeping in mind the immediate cost to the company and taking cognizance of long-term costs and benefits, the plant head had to make his final recommendation to get a purchase order out before the end of the month.
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