chap 4

Question 1

what is purchasing objective?

Answer 1

obtain goods and services:
of the required quantity and quality
at the lowest possible cost
at the best possible service and delivery
while maintaining and developing suppliers

Question 2

Purchasing cycle starts with?

Answer 2

purchasing specifications like right quality, right quantity, Right time, Right Place

Question 3

what to buy depends on ?

Answer 3

-Quantity (JIT, safety stock etc.)

-Cost considerations (Meet budget goals)

-Expected quality
Quality level needed (Meet 99.99999% service level goals)
Those characteristics of product determined by final use

-Function, quality, service, and cost are interrelated

Question 4

what are the factors in selecting suppliers?

Answer 4

-Technical ability
Can they be a partner for our future technology leadership?

-Manufacturing capability
Do they have the capability to meet our technology needs?

-Reliability
What is their history of providing reliable products?

-Spares service
Do they have timely service history for our spares needs?

Question 5

what factors in selecting suppliers?

Answer 5

-Location
Are the supplier plants and warehouses located to meet our needs for timely distribution? Are they close to the plant?

-Price
Are they price competitive?

-Financial stability
Are the suppliers financially stable to continue in business?

-Management attitude
Is the supplier senior management partnership oriented or only cost focused?

Question 6

What are included in supplier agreements?

Answer 6

price, terms, delivery. quality and quantity