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DIALOGUE:
FURTHERING NEGOTIATIONS |
| Sunburst, Inc., a Mexican company, is negotiating a contract with Gemini, Ltd., a Taiwanese company, for the manufacturing of PC mainboards. John Liu is the Production Manager for Gemini and Cynthia Chase is the Purchasing Manager for Sunburst. |
| Cynthia: | What is your production situation now? Do you have the capacity to provide us with a substantial number of units? | |
| John: | Provided that you give us sufficient notice, we have the production capacity to meet your needs. What sort of quantities are you looking for? | |
| Cynthia: | We are considering an initial quantity in excess of 200,000 units, with additional similar quantities ordered on a quarterly basis. | |
| John: | What did you have in mind regarding specifications? | |
| Cynthia: | We would like units for both P4 and AMD CPUs. About 20% would be for entry-level desktops, 40% would be for business use and the remaining 40% for multimedia use. Supposing we placed an order for 200,000 units for the second quarter of 2004 and follow-up orders of 200,000 units for each of the following three quarters, what unit price could we expect? | |
| John: | As long as we are clear on your specifications and have 30 days before beginning production, we could offer a unit price of NT$1,700. | |
| Cynthia: | If we doubled the number of units in our order, what discount on the unit price could we receive? | |
| John: | Before I answer that, could you tell me what you were thinking about in terms of delivery dates? | |
| Cynthia: | We were thinking about delivery dates of 120 days following our order. | |
| John: | On the condition that we would have such a delivery period, we could offer a 5% discount on the larger order. | |
| Cynthia: | If you could offer an 8% discount, then we could agree to place the larger order. | |
| John: | Supposing we offered a compromise discount of 6.5% on the larger order, would that satisfy you? | |
| Cynthia: | I think we can live with that providing you supply good technical support and documentation in Spanish. | |
| John: | No problem. We can do that. | |
| Cynthia: | OK. It's agreed then. | |
| John: | Thank you. |