Professional Documents
Culture Documents
Chapter 7 Purchasing
Purchasing
Click to edit Master title style
Income Statement
Sales $100
Cost of Goods Sold
Purchases $50
Other expenses 40 90
Profit Before Tax $ 10
Sales $110
Cost of Goods Sold
Purchases $55
Other expenses 44 99
Profit Before Tax $ 11
Sales $100
Cost of Goods Sold
Purchases $49
Other expenses 40 89
Profit Before Tax $ 11
3. Selecting supplier
right source: sole, multiple, single
Purchasing
Click to editFunctions (continued)
Master title style
Copies to:
Supplier
Originator
Accounting
Receiving
Purchasing file
5. to
Click Follow-up and Delivery
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Quantity requirements
Price Requirements
Functional Requirements
ClickQuantity Requirements
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Small volume
find a standard item
Large items
design for economies of scale
reduce cost
satisfy functional needs
Price
Click to editRequirements
Master title style
1. Brand
2. Physical and chemical specifications
Material and method of manufacturing
Performance
3. Engineering drawings
4. Miscellaneous methods
Click1.toDescription
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Brand style
Small quantity
not worth the effort of developing specifications
Preferred by
customers
the buyer
Click1.toDescription
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Brand style
Limits competition
higher price
easy to inspect
Performance specifications
state what the item is supposed to do
uses supplier expertise
Click3.toEngineering
edit MasterDrawings
title style
Combination of methods
e.g. curtains
drawing of the window dimensions
fire or safety rating
type of material to use
samples of pattern desired
Click toSelecting Suppliers
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Technical ability
Manufacturing capability
Reliability
After-sales service
Location
Other considerations
Price
Click to Technical Ability
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Reputable
Stable
Financially strong Were in
this
together
Click toAfter-Sales
edit MasterService
title style
Credit terms
JIT
Information technology
Price title style
Click to edit Master
On-going relationship
Mutual benefit
Internet
Catalogues
Salespeople
Trade magazines
Trade directories
Salespeople of the buyers firm
Supplier Selection
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Weighted-Point Planstyle
Package of:
function
quantity
service
price
you only get what you pay for
Click to Basis for Pricing
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Fair price
competitive
gives seller a profit
allows buyer to make a profit
Upper limit
established by buyers
Lower limit
established by sellers
Click to Analyzing Costs
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Fixed Costs
costs incurred no matter the volume of sales
equipment, insurance, overhead
Variable Costs
costs which vary with the volume produced
direct labor, direct materials
Click to Analyzing Costs
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Commodities
price is determined by the market
concern for future contracts
Standard products
price set by catalogue listings
little room for negotiation
Procurement
establishing specifications, selecting suppliers, determining
price, negotiations
Supplier scheduling and follow-up
same as production activity control
execute the master schedule and the MRP
ensure good use of resources, minimize WIP, provided the
desired level of customer service
ClickBuyer / Planner
to edit MasterConcept
title style
Purchasing
coordinates the flow of goods from suppliers
Flexibility
in volume
in products needed
Reliable
in delivery promises
Close to
Click Relationship with
edit Master Suppliers
title style
Internet
open public access to posted information
valuable source of supplier and product information
Intranet
internal to company personnel only
Extranet
between participating companies
Supply Chain Management
Click to edit
Organizational Master
Implications title style
Information sharing
costs
schedules
inventory levels
Measurement systems
all aspects of the supply chain