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As a manager of the Ponchartrain Yard Art Corporation, you have negotiated with several vendors and are ready to sign a two-year contract with Toy Yachts R Us. Under the contract, they will ship to you 5,000 plastic bathtub yachts per month at a price of $4,000 per 1000. You are reading an industry blog and discover an article that indicates a researcher has developed a new molding process for plastic that uses the energy of the current process. Bathtub yachts are produced using the plastic molding process described in the article, and the new process will be widely available in 6 months. How specifically does this information affect your desire to sign a two-year contract with Toy Yachts R Us?

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This solution discusses the Ponchartrain Yard Art Corporation scenario and explains how the information received affects your desire to sign a two-year contract with Toy Yachts R Us.

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As the manager, you won't sign the two-year contract with the vendor. The vendors will ship a certain amount per month, and the best choice is to have the contract amended to shorten the term of the contract to a 7 or 8 month period (8 at the most). Because the new process has been developed and already has a scheduled (estimated) release period of six ...

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