Tires are important components of a car. Manufacturing tires for car companies and for the regular car owner is highly profitable as cars being bought by the millions every year. I am the owner of “Carbonic Tires” a well known tire manufacturing company named after one of the major ingredients in making tires and give it reinforcement. I have a ten million peso budget for the next quarter to spend for buying two important materials in manufacturing tires, Natural Rubber and Carbon Black.
Natural rubber is the basic elastomer used in tire manufacturing then synthetic rubber is often added by manufacturers to reduce cost. To avoid loss of quality, Carbon Black is then added which gives the final product reinforcement and abrasion resistance, it forms a high percentage of the rubber compound. Both can only be bought overseas, though Carbon Black supply is readily available in most of European countries, it can also be bought cheaply from India and China. On the other hand, the best quality of natural rubber are quite expensive and can only be bought from Brazil, as it is extracted from rubber trees that are very sensitive to the weather.
Starting off is with the Carbon Black. Though I already have two suppliers, one in Spain and another in India, I’m planning to look for at least two more for contingencies. I would prefer suppliers that can be settled with call-off contracts as Carbon Black is a major component and tire demand fluctuates with the global economy on automobile use and demand. Timeliness and customer service are my only criteria for supplier appraisal as I want them to be in time when the demand arises.
Second is the natural rubber. I have a partner in Brazil that produces excellent quality of natural rubber, but similar to Carbon Black, I need one more for contingency as I have said earlier rubber trees are sensitive to weather, and if my partner’s region is under heavy tropical weather conditions he might not be...
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