Great Western Bank free essay sample

Great Western Bank never mentioned to Data Max to give them a discount, but still Data Max offered them 2% discount by shipping through a different carrier. Great Western Bank was also at fault because it did not check the invoice properly and it seems that they ignored the shipping details stated on the invoice. They went ahead and paid the invoice before receiving the machines to get 2% discount. Another fact related to this case is that the goods were sold to Great Western Bank F. O. B. Cincinnati. This means that the title transfers to the buyer when the goods are loaded on the truck and the buyer pays for the shipping too. So, if the goods are lost or damaged in transit then it is not Data Max’s responsibility. Since, the title was passed on to Great Western Bank; Data Max suggested the bank to deal with the carrier and to file a claim with the carrier for the damaged machines. We will write a custom essay sample on Great Western Bank or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Another fact which cannot be ignored is that Data Max shipped the machines through a different carrier than what was designated by the bank. III. ANALYSIS OF THE FACTS: Data Max was a fault for not shipping the accounting machines through the designated carrier (Yellow Freight). It was made clear by the Great Western Bank purchasing agent that they want Yellow Freight as the carrier. Data Max also acknowledged the terms and conditions and returned the signed copy without making any change in the terms, that they could change the carrier or any other condition. It was decided in the purchase order that it will be F. O. B. Cincinnati, so the title passed on to the bank when the goods were loaded in the truck. Once the machines where loaded in the truck, the title passed to them and they will own the machines. So, when the truck gets involved in an accident, and all the machines are damaged, the loss needs to be borne by the bank, since they owned the machines. Another mistake which was made by the Great Western Bank was that they paid the invoice before the goods were received. Just to save some money by getting 2% discount for paying early, they took a big risk. They did not even read the invoice carefully because it said the shipping details, which were the changed shipping details. But since they assumed that Data Max will ship through Yellow Freight, they ignored shipping details. After the loss, when the bank contacted Data Max, Data Max told the bank that they changed the shipping carrier, but they saved the Bank some money. But in my opinion that is not a valid reason. Data Max never wanted discount or wanted to negotiate on the order amount. It was Data Max who first sent the invoice to the Bank and offered them 2% discount. The bank paid the invoice thinking it is 2% discount for paying early and not because of changed shipping carrier. The primary objectives of the buyer (Great Western Bank) are to get a refund for the loss. Right now the bank has paid for the machines and will never get to use it since they are all damaged. So it is important for the bank to get refund for the money which they paid. Filing a claim is also required by the bank to get back the money or the machines. Data Max knows that they are wrong but still they are not ready to accept that they are at a fault. They still want Great Western Bank to file a claim with the truck line. IV. ALTERNATIVES: As a staff analyst, I think that there are many alternatives present which can save the Bank from a huge loss. Actually in this dispute I feel that Bank is right because they made it clear in the purchase order that the machines needs to be shipped through Yellow Freight and also paid the invoice before time as per their custom. But still the carrier was changed by Data Max without asking or informing the bank. In my opinion, the alternatives which the bank can pursue include, firstly, filing a claim with the truck line and requesting them to compensate for the loss. This is because, it was the truck which had an accident and that damaged the machines. Second, Great Western Bank can sue Data Max and change the F. O. B. point to F. O. B. destination from the next time. It will help them in a long run because it is safe for buyers to use F. O. B. destination and Great Western Bank should avoid paying for the goods or services which have not been received or delivered. They should always pay for the goods and services after they have been delivered. This will help them to save the money which they will spend to file claims later on. Third, Great Western Bank should communicate with Data Max and ask them if they could at least help them to file a claim with the truck line which Data Max used to ship orders. Data Max used that truck line to ship orders because probably they have a pact or some business relations. So, Great Western Bank can get into a deal with Data Max that if Data Max Corporation helps the bank to file a claim against the truck line and get a refund then Great Western Bank can commit to Data Max that they will always place an order with Data Max for all the machines. Fourth alternative which is possible is that Great Western Bank can change some of their policies while dealing/ordering with other companies. Great Western Bank should decide on making change on the purchase order terms and conditions which save them from having a loss. In respect to this case, Great western Bank should change terms of purchase order to F. O. B. destination and should pay for good after receiving it. Now what Great western bank can do is to still place an order with Data Max for additional 12 machines, but this time with new terms and conditions. Also, Great western Bank should talk to the management of Data Max and tell them to give significant amount of discount on the additional 12 machines, so that Great Western Bank is compensated for the loss in some way. By doing this Great Western Bank will get some discount on this order as well as on other orders to come and will maintain and strengthen business relationship with Data Max. V. RECOMMENDATIONS/ SOLUTIONS: The situation which is present at the moment between the Great Western Bank and the Data Max Corporation is actually avoidable. If proper changes are made to the terms and conditions of the order by the buyer or the seller if the invoice is carefully read, then problems like these will not occur. The buyer (Great Western Bank) did not handle the situation correctly because when they received the invoice from Data Max, they should have not paid it till the goods were received. They should not have thought of saving 2 % by paying early. It is very important to understand that goods are services should always be paid for after they have been delivered. In the purchase order, Great Western Bank should have added more terms and conditions and should have made it clear that they will accept the machinery only if it will be shipped via their designated carrier. Also, in the purchase order they should have changed F. O. B. origin to F. O. B. destination. In my consideration, the solution/ recommendation what I can suggest is that from future, Great Western Bank should make proper changes to the terms and conditions to the purchase order. Also, it should change F. O. B. origin to F. O. B. destination. It will help them because they will pay for the goods after they receive it. In F. O. B. estination, the goods in transit will be owned by the seller and claims (if any) will also be filed by the seller. So, Great Western Bank will play safe. Presently, for the loss of $114,000 ($9,50012 machines) which happened due to the truck accident, Great Western Bank should talk to Data Max and try to negotiate with them and make Data Max realize tha t actually it was their mistake. Great Western Bank should talk to management of Data Max and tell them how important it is for Great Western Bank to receive the accounting machines and should try to assure them that in future the bank will give all the order for machines to Data Max. Then Great Western Bank should order 12 additional machines based on their new terms and conditions relating to shipping, F. O. B. destination and request Data Max to consider and offer discount on this new order so that the bank is compensated in some or the other way for the last damaged order. This will help bank to recover their damage over a course of time and also strengthen their relationship with Data Max.