Part I – The Pre-Contracting Phase
Fact Pattern and Assignment
- You are the new supply chain and vendor risk manager for Ethical Coffee, Inc.
- Sketch of Ethical Coffee’s Supply Chain
- Ethical coffee purchases green coffee from farmers in Colombia, Costa Rica, Yemen, Saudi Arabia, Ethiopia, and Papua New Guinea.
- After its local agents (all independent contractors) have sourced and purchased the coffee beans, Ethical Coffee contracts to transport the beans to the closest suitable shipping port.
- Ethical Coffee also contracts with port warehouses to store the coffee until the shipping date.
- Ethical Coffee enters into contracts with container ship companies to have the beans shipped to New York, San Francisco, or New Orleans.
- Once the beans arrive in the U.S., they are transported by truck and/or train to the company’s 5 regional roasting plants.
- After the coffee beans are roasted, they are packaged and shipped to grocery stores and to Ethical Coffee’s 10,000 coffee shops.
- The company’s founder recently sold Ethical Coffee, Inc. to a retired Wall Street investment banker, who loves coffee but has little knowledge of the coffee industry.
- As a result, the new owner has asked you to write a 5 page report (double spaced, one inch margins, 12 point Times New Roman font) discussing the vendor and third party risk management issues in the following 3areas: see attached.
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