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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.

  1. 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?

  1. Evaluate the impact cost-plus pricing has on distributors, customers, and suppliers. 3. What effect will ABP have on customer behavior?
  2. 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?

  1. What are the obstacles to successful implementation of ABP at Ideal?

(a) How would you address these obstacles?

  1. What type of customers will adopt ABP first?
  2. How difficult or easy is it for O&M’s rivals to adopt ABP?
  3. Work through the numerical exercise below by filling the provided template.
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