Read carefully the case study entitled Owens & Minor, Inc. (A) and answer the following questions. Note that you are allowed more than one page for this assignment. Please try to keep the answers short and to the point.
- What are the services rendered by the distributor to manufacturers and hospitals?
(a) How has the nature of distribution changed over time? (b) What is the value-added by O&M?
- Evaluate the impact cost-plus pricing has on distributors, customers, and suppliers. 3. What effect will ABP have on customer behavior?
- Explain Exhibit 5. How does the pricing matrix work?
(a) How do the costs in Exhibit 5 correspond to the costs shown in the customer profitability statement in Exhibit 4?
(b) Why doesn’t the matrix comprise all the costs shown in Exhibit 4?
- What are the obstacles to successful implementation of ABP at Ideal?
(a) How would you address these obstacles?
- What type of customers will adopt ABP first?
- How difficult or easy is it for O&M’s rivals to adopt ABP?
- Work through the numerical exercise below by filling the provided template.