Dana Davis dropped into the store’s receiving department of Regina Steel Fabricators, one of the company’s oldest and best accounts. Dana had been called by Tyler Hensman, their senior purchasing person, to inspect the last shipment of structural tubing sold to them. According to Tyler, when the tubing was sheared to the lengths required, the shear had dimpled the ends of the tubes and the dimples had nor been removed as requested. The tubed were therefore not perfectly round and the casters that were to fit into the ends would not do so without considerable effort. Davis was puzzled by the quality control problem. The company has a long-standing policy of not shipping a product to a customer unless it has passed inspection by the quality control staff. Dana arrived just after lunch, and while waiting for Gary Anderson, the store’s supervisor, noticed that there was a large shipment of stainless steel bolts and nuts sitting in the store’s receiving area. They were marked type 304 stainless steel, one of the cheaper grades. Dana was curious because a price quotation had been given to Tyler Hensman the previous week on the same material in type 316 stainless steel, a much more expensive grade. Dana Davis approached a young clerk who was working in the receiving area. “Where did that shipment come from?” “Quality Distribution,” the young man replied, without looking directly at Dana. “What was the cost of the material?” Dana inquired. “Don’t know. My copy of the order doesn’t show a cost, nor does the packing slip that came in the shipment,” the young man said as he shrugged his shoulders. “Is it supposed to be type 304 or type 3167” Dana persisted. “It just says stainless steel bolts and nuts on my copy of the purchase order,” replied the clerk. “And the packing slip just says stainless steel as well. There’s no mention of type of stainless. If you want to find out more, you’ll have to contact Tyler Hensrnan in our purchasing department. This order was placed by him.” Dana Davis was getting more curious about the shipment from Quality Distribution. Upon returning to the office, Dana decided to call Tyler Hensman and ask for the order. A decision was made not to mention what was seen in the store’s receiving area. “Tyler, I’m calling about that price quotation I gave you last week for 316 stainless steel bolts and Will you give us an order?” “Sorry. I placed the order with Quality Distribution last week because their price better,” Tyler replied. “You’ll have to sharpen your pencil if you want our business.” Dana Davis knew there was no way Quality Distribution could compete on price because it was basically a small jobber firm that really wasn’t in the stainless steel business. But Dana didn’t want to say that to Tyler Hensman. “How much sharper?” “Just a bit, but you know it wouldn’t be honest for me to tell you,” Tyler laughed After they talked for a few more minutes, Dana Davis promised to check pricing options and determine if the next price could be more competitive. After hanging up the phone, Dana sat at her desk, staring at the wall. Davis realized a careful approach was needed. There was something wrong and the issue needed to be resolved quickly. This was an important long-term account for American Steel, and the company couldn’t afford lose it. Page 3 of 5 QUESTIONS Q2 a: Has Dana Davis’s behavior been ethical? Why or why not? (2 marks) Q2 b: Has Tyler Hensman’s behavior been ethical? Why or why not? (2 marks) Q2 c: What should Dana Davis do to preserve this long-term account? (