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As Nadha Klu, manager for Xcelent Xtrusion, examined the Purchasing Department’s performance, he noticed a pending order for 200,000 units of a plastic part used in making an assembly to be shipped to the Zero Defects Corporation. Purchasing agent Val Cano was buying the part from the Center of Spec Company at a cost of $0.25 per unit, but an accompanying bid from the In Spec Company showed $0.24 per unit.
“Val Cano,” he said. “We always seek the lowest bid, to save costs and assure high wages for top managers. But you seem to be taking the higher bid, and this is unacceptable, since even though the difference is only one cent, the order will cost the company $2,000 more. Your department will be $1,000 over its budget with this order, and this, too, is unacceptable.”
Under the circumstances, was Nadha Klu right to admonish Val Cano for taking the higher bid?
a) Yes
b) No
c) Need more information
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