The following situation can occur within a business that you represent. ABC Company Inc. is a manufacturer that has been in existence for over 25 years. ABC’s sole owner, as he looks to the future, sees a trend developing in his industry. He notices that the majority of customers now placing orders are also requesting a modification of his product, one that he is currently unable to perform at his factory. ABC, with a desire to change along with technology, begins to look at the purchase of machinery necessary to perform the modification. After an extensive search, ABC settles on XYZ Equipment Inc. to provide the necessary machinery. ABC signs a contract with XYZ, and on Jan. 1 of the subsequent year, the machine is up and running.
Almost immediately, there are problems with the equipment, and these issues trickle down to affect the customer base. Customers are complaining, with products being returned and orders slowing down, resulting in a significant decrease in ABC’s sales. After several months of unresolved problems with XYZ’s equipment, ABC decides to purchase another machine from a competitor company of XYZ.
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