Wholesale Health Supply sells a variety of medical equipment and supplies to retailers. When a new retailer is approved for credit, one of the criteria is that the retailer must have been in business for at least six months. Good Earth Foods placed a large order with Wholesale Health Supply and requested credit terms. Wholesale Health Supply faxed a credit request form to Good Earth Foods, and the buyer at Good Earth Foods faxed the completed form back to Wholesale Health Supply. Robin Sylvester, the sales manager at Wholesale Health Supply, saw the credit application and noticed Good Earth Foods had only been in business for two months. Thinking she might lose the order if Good Earth Foods wasn't extended credit, Robin authorized the shipment. She figured by the time the credit department rejected the application, Good Earth Foods would have received the order and the vice president would override the rejection to keep a new customer. Robin was sure that everything would turn out alright.

1. Do you think Robin's decision to ship the order was unethical? Why or why not?

2. What would you have done if you were in Robin's position?

3. Write memo from the credit department manager to Robin Sylvester explaining the reasoning behind requiring a new credit customer to be in business for at least six months?

4. In small groups, discuss ways to prevent a situation like this from happening?

1) Identify the Robin Sylvester's decision is ethical or not

To get a new retailer approved for credit, one of the criteria is that the retailer must have been in business for at least six months.

Here Robin Sylvester intentionally approved Good Earth Foods purchase order to increase sales of the company. However, Robin Sylvester knows that Good Earth Foods cannot get credit from the company Hence, Robin Sylvester's decision shall be considered as an unethical decision.

2)  What would you have done if you were in Robin's position?

In this situation we need to explain about credit term i.e. 6 month transaction experience with company. Other motivation things should discuss like if company purchased this order after two months Good Earth Foods can get credit from the company. So we can retain the retailer Good Earth Foods

3. Prepare a memo to R's regarding credit terms:

Regarding: Credit terms

To get a new retailer approved for credit, one of the criteria is that the retailer must have been in business for at least six months. Here Good Earth Foods has two months experience and Company allowed credit transactions to retailers, which are more than 6 months transactions with the company, company cannot allow credit to Good Earth Foods.

4) In small groups, discuss ways to prevent a situation like this from happening?

Proper coordination is required between credit department manager and sales manager. Here sales manager should follow company policies

Purchase order should accept as per the terms mentioned by the customer. If not possible then sales manager needs to explain credit policies of the company to its customers.