XYZ orders 5,000 custom-made parts from ABC for one of its products. When the order is originally made, ABC indicates it will charge $75 per part. The contract states that ABC will use thehighest quality materials in manufacture.?
After the agreement is completed, but before production of the part begins, ABC engineer Christine Casten decides to do a little reading in the literature to find out whether there is any other material that can be used to manufacture the product. She finds that a new and much less expensive metal alloy (M-2) can be used instead of -1, which is customarily used to manufacture the part. The use of M-2 will cut ABC's cost by about $18 per part. As far as she can tell, there will be no difference in the part. It will be no better or worse. The differences in materials would be undetectable unless someone was looking for a difference and did a fair amount of testing. However, M-2 does not have the track record in actual use as M-1 so the long-term reliability can not be determined for certain. Christine could recommend to management that ABC should?
1. Use the M-2 in the part without notifying XYZ and make and additional $18 per part profit.
2. Dive XYZ the option of using M-1 or M-2 at the original price. Saying that the new alloy will perform as well as the old.
3. Give XYZ the option of using M-1 at the old price or M-2 at new price. Saying that the new alloy will perform as well as the old, but the long term reliability is not known.
4. Use M-1 at the old price and save M-2 for use with the next order.
I can only think of one word that best fits action number one listed above, fraud. This is unethical according to the IEEE code of ethics. The second item in the code says 'to avoid real or perceived conflicts of interest whenever possible, and to disclose them to affected parties when the do exist.? This action is a conflict in interests because ABC wants to make
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