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The supply management director at Texas Oil Field services has contracted to purchase $2 million of spare parts that are currently unneeded. His rationale for the contract was that the parts were currently available at significantly reduced price from the standard price. The company just hired a new president who, on learning about the contracts, stated that the parts contracts would be canceled because the parts would not b needed for at least a year. The supply management director informed the president that the penalties for canceling the contracts would cost more than letting the order go through. How would you respond to this situation from the standpoint of the president? From the standpoint of a supply management director?

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