Purchasing Management Process Chapter 3

The primary task is to secure timely and undisturbed availability of purchased goods and services from reliable suppliers.

TCO consists of direct material costs and indirect material costs related to logistics and handling of materials.

Purchasing can reduce costs by ensuring goods and services are supplied at the lowest total cost of ownership and minimizing indirect costs.

<p>Continuous improvement involves product and process innovation through partnerships with suppliers.</p> Signup and view all the answers

<p>If not executed effectively, the buyer and the purchasing department risk losing credibility.</p> Signup and view all the answers

<p>Buyers should ensure materials and services are available in line with the requirements of the internal customer.</p> Signup and view all the answers

<p>To reduce the company's risk exposure related to its supply markets.</p> Signup and view all the answers

<p>To minimize technological and supply risks and ensure reliability.</p> Signup and view all the answers

<p>They should consider the effects on other business activities and focus on total cost of ownership.</p> Signup and view all the answers

<p>They should lead in orchestrating the activities of all players involved in purchasing decisions.</p> Signup and view all the answers

<p>High quality and punctual delivery.</p> Signup and view all the answers

<p>Through close cooperation with all disciplines and top managers involved.</p> Signup and view all the answers

<p>Top management commitment influences purchasing strategy by demonstrating active interest and involvement, which can lead to better alignment of purchasing objectives with overall business goals.</p> Signup and view all the answers

<p>Functional leadership plays a critical role in purchasing decisions as it relates to the personality and management style of the purchasing manager, which affects negotiation and supplier relationships.</p> Signup and view all the answers

<p>It is important for top management to be involved in purchasing strategy to ensure that purchasing aligns with strategic objectives and that adequate support and resources are allocated.</p> Signup and view all the answers

<p>They symbolize different virtues: the Scarecrow seeks wisdom, the Tinman desires a heart, and the Cowardly Lion seeks courage.</p> Signup and view all the answers

<p>A purchasing manager’s style can impact supply issues by influencing communication with suppliers and decision-making processes, which can either mitigate or exacerbate potential supply disruptions.</p> Signup and view all the answers

<p>Dorothy faces various challenges that require her to be resourceful and brave, ultimately leading to personal growth.</p> Signup and view all the answers

<p>Leadership characteristics of a purchasing manager affect the purchasing process by shaping the team's morale, encouraging collaboration, and driving strategic initiatives that enhance overall purchasing effectiveness.</p> Signup and view all the answers

<p>The Yellow Brick Road symbolizes the path to self-discovery and the journey towards one's goals.</p> Signup and view all the answers

<p>The Wizard is a humbug who uses illusion to project power, highlighting that true strength comes from within.</p> Signup and view all the answers

<p>Glinda serves as a guide for Dorothy, providing wisdom and support that help her navigate the challenges in Oz.</p> Signup and view all the answers

<p>Dorothy learns that home and belonging are found within oneself, and she always had the power to return home.</p> Signup and view all the answers

<p>Key components include cleaning, catering, security, and building maintenance. They are important for ensuring a safe, functional, and pleasant workplace for employees and clients.</p> Signup and view all the answers

<p>Financial services like banking, insurance, and accounting help manage cash flow, mitigate risks, and ensure compliance with tax regulations.</p> Signup and view all the answers

<p>Professional services, including legal and management consultation, provide expertise and strategies that guide businesses in risk management and operational efficiency.</p> Signup and view all the answers

<p>Research and development technical services support innovation through technical maintenance, development, and engineering services, which help companies stay competitive.</p> Signup and view all the answers

<p>Transportation and distribution services, including warehousing and logistics, streamline the movement of goods and reduce lead times, enhancing overall supply chain efficiency.</p> Signup and view all the answers

<p>The buyer should ensure that the supplier has sufficient capacity available at the moment the service needs to be provided.</p> Signup and view all the answers

<p>The performance to be delivered by the supplier should be specified instead of the activities to be conducted.</p> Signup and view all the answers

<p>The buyer should check the reputation, expertise, and qualifications of the supplier.</p> Signup and view all the answers

<p>A performance-based payment schedule should be agreed upon.</p> Signup and view all the answers

<p>Agreeing on an effective communication structure helps facilitate clear and timely exchanges of information.</p> Signup and view all the answers

<p>The buyer should request the CVs of key personnel and ensure their availability during the delivery period.</p> Signup and view all the answers

<p>Input specification focuses on the resources and capacities that the service provider will use to deliver the required service.</p> Signup and view all the answers

<p>Throughputs refer to the processes and activities that must be in place for the service provider to produce the required service.</p> Signup and view all the answers

<p>Output specification entails a clear description of the results that must be achieved and delivered by the service provider.</p> Signup and view all the answers

<p>Selecting service providers is challenging because the scope of services is often less defined, making it harder to identify necessary qualifications.</p> Signup and view all the answers

<p>Buyers should thoroughly check supplier references, previous customer experiences, and the supplier's reputation.</p> Signup and view all the answers

<p>Preliminary prequalification should cover the provider's organization, operational processes, expertise, capacity, and quality of staff.</p> Signup and view all the answers

<p>Input specifications might lead buyers to seek specific certificates or diplomas from the provider.</p> Signup and view all the answers

<p>Specifications clarify expectations regarding inputs, processes, and outputs, which aids in establishing a successful working relationship.</p> Signup and view all the answers