103 typesofpurchases

311 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
311
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

103 typesofpurchases

  1. 1. Types of purchase
  2. 2. Type of purchase • Capital equipment • Raw materials • Original equipment part (OEP) • Maintenance, repair and operating (MRO) • Services
  3. 3. Discuss • Describe the types of goods IBM purchased for its operations? Types Items 1 2 3 4
  4. 4. Purchase of capital equipment • Item may be physically large • May be in single or multiple units • The way it is handled is not affected by accounting classification • Usually need approval from top management
  5. 5. Purchase of OEP • Usually a standardized component of a finished product • Needed continuously in manufacturing • Components likely to remain the same over years • Same items may be purchased over many years and for different purpose • High volume
  6. 6. Pricing of OEP • Usually substantially Low • Factors that influence pricing – Quality – Delivery – Packaging – Additional features
  7. 7. Discuss • Can IBM leverage on its power for its purchase of OEP? Explain
  8. 8. Purchase of MRO • Usually purchase in low volume, sometimes in one or two pieces • In low value – But a repair item may require the entire plant to shut down, causing thousands of dollars, for the repair work • Frequency: Can be low, maybe once in a life time of the machine
  9. 9. MRO buyers • Under pressure to meet urgent needs • Not too concerned about pricing • The objective: To satisfy the requestor • Most cost is with placing the order and documentation • Modern purchasing use EDI or system contracts to reduce cost of transaction
  10. 10. Small value purchase • Delegate order placement to users • Methods – Telephone orders – Petty cash purchase – Standing order, e.g. Electric fitting contractor • Stockless buying
  11. 11. Discuss • Recommend the efficient purchasing system for the following: – a) Standard ‘Original Equipment Parts’ orders; – b) MRO items (small orders)

×