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FGH, Inc.

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FGH, Inc. has purchased components from Supplier A for many years. The supplier's performance has been very good, with reliable deliveries and consistently high quality. As contract renewal approaches, Supplier A informs FGH's supply manager that a significant price increase is anticipated, based primarily on the costs of building a new production facility. The supply manager has been directed to negotiate a new contract with Supplier A only if it agrees to maintain current pricing. Which of the following is the BEST way for the supply manager to prepare for negotiations with Supplier A?

A.

Determine if the parts made by Supplier A can be produced elsewhere

B.

Discuss alternate product designs with engineering

C.

Enlist FGH's executive management to participate in negotiations

D.

Research into whether Supplier A's recent expansion costs are reasonable

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