Consider 2 negotiations. S is the seller and B is the buyer. S and…

Question Answered step-by-step Consider 2 negotiations. S is the seller and B is the buyer. S and… Consider 2 negotiations. S is the seller and B is the buyer. S and B are negotiating unit price for some widget. It cost S $15 to produce the widget, and S knows that he can sell all the widgets he can produce. Before starting the negotiations with B, S knows that he has 3 other buyers for the widgets. Buyer X offers to buy them for $12, buyer Y offers to buy them for $18 and buyer Z offers to buy them for $18.50. But S does not know the value of the widget to B. S’s BATNA is to sell to Buyer _______. S’s reservation priceis __________. B uses the widget as a component for a finished product. B has a potential low-cost supplier for the widget who agreed to supply widgets at $20 per unit. B also can produce in-house at $25. B thinks that S can produce higher quality widgets than the other potential suppliers, and as high a quality as B can produce in-house. Quality is somewhat important to B and in terms of the TCO. High quality like S can deliver is worth about 20% mark-up over the low-cost supplier. Is B’s BATNA to (A) buy from the low-cost supplier or (b) to produce in-house?__A__ (A or B). B’s reservation price is________. Engineering & Technology Industrial Engineering Supply Chain Management OPRE 6371 Share QuestionEmailCopy link Comments (0)