Frank is the receiving dock supervisor for Cabinet Co., a company that manufactures metal storage cabinets. His job is to supervise the inspection, and stocking of components and materials used in the manufacture of the cabinets as they are delivered; and to so notify the accounting department so invoices can be timely paid. On June 1, the company received a shipment of casters used in the manufacture of rolling cabinets. This new shipment would not be needed for three weeks as there were plenty of casters located on the assembly line. The storage facilities where the casters would normally be placed were under renovation, and there would be no space to store this latest shipment of casters until June 20. Frank decided to leave the unopened boxes of casters in a secure and covered corner of the receiving dock. He did, however, notify the accounting department that the casters had been received. The accounting department paid the $8,000.00 invoice in time to earn the discount if paid within ten days.
On June 20 Frank had his workers open the boxes of casters to inspect then and place them in the appropriate space in the storage facility. Upon inspection it was determined that nearly all of the casters were defective and unusable. This caused the company to default on several contracts for rolling cabinets as it ran out of casters before it could secure replacements for the defective ones. Cabinet Co. was able to replace the casters at a 15% increase in cost.
Need a 3 page paper discussing Cabinet Co.’s remedies, duties and obligations with respect to the casters.
Solution Preview
Cabinet Co.’s remedies are related to the facts of the case.
Frank’s job is to supervise the inspection, and stocking of
components, and materials used in the manufacture of cabinets as
they are delivered. After performing these duties he is required to
notify the accounting department so that invoices can be paid in a
timely manner. On June 1 when the company received a shipment of
casters used in making rolling cabinets, it was the duty of Frank
to supervise the inspection of the casters and then stock the
casters. Instead, Frank did not inspect the casters on June 1 and
stored the casters in the receiving dock. Frank should have asked
his workers to inspect the casters on June 1 and then leave the
boxes of casters in a secured and covered corner of the receiving
dock. Even though there was renovation in the storage facilities
that was no excuse for Frank not getting the casters inspected by
his workers. The second element of negligence by Frank was that he
notified the accounting department that the casters had been
received. Frank should have first got the casters inspected and
then notified the accountant about their delivery. The payment was
released by the accounting department in a timely manner …
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