...Case 1-3: Southeastern University Situation: * Heather Sloman is a buyer in the purchasing department for Southeastern University * Walter bought a $14,000 piece of equipment without following standard university purchasing policies * Purchasing is centralized and responsible for negotiating with suppliers, signing contracts with suppliers, and supervising the execution of contracts * Supplier is not on the approved supplier list and quotes from three approved suppliers are less than the one Walter chose or involve better service * $75 million spend Basic Issues 1. Acceptable suppliers 2. Price, quality, service 3. Budgeting 4. Authority for internal users/following purchasing policies 5. Purchasing for a public institution/service organization Tasks: * Define alternatives * Keep the machine and pay for the supplier. * Return the equipment and negotiate the cancellation penalty * Go back to the supplier and use the quotations to negotiate a lower price * Improve the purchasing process to avoid unauthorized purchases * Obtain information from unapproved supplier via RFQ Actions: * Evaluate unapproved supplier with RFQ * Accept the supplier * Acquire purchase information * Decide whether to add supplier to list of approved suppliers * Reject the supplier * Return the equipment * Negotiate the cancellation penalty. * Consider quotes...
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...Purchasing Centralized purchasing is when a company’s corporate office takes control of all the purchasing for the business. This allows for central management and volume purchases that lead to better prices and terms as well as the ability to work with larger suppliers. This central control enables more efficient inventory control, lower staffing costs and a decrease in overheads. Staff also benefit with better training and support and the ability to build better relationships with suppliers. Many large companies either have experienced quick growth through mergers and acquisitions, and they often have several separate purchasing departments that are each responsible for purchasing a group of products. In a company with a local purchasing structure, departments purchase their own materials and supplies with minimal oversight from corporate. Some companies adopt a hybrid structure, in which some classes of items are purchased centrally and some are purchased locally; or a spending limit is given, with local managers responsible for purchasing goods up to a certain dollar amount. There are advantages to both centralized and a local purchasing program. A centralized program allows for fewer overheads, there is no a longer duplication of staff and the purchasing procedures are standardized. Centralized purchasing may bring better pricing and discounts based on volumes and freight charges and handling may be reduced with better volumes and fewer deliveries. Buyers can...
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...IV. Purchasing Cycle Ordering materials, supplies and services The Purchasing Group is responsible for receiving Purchase Order request forms from different departments. Usually, the majority of orders come from Planning Department because they use JIT inventory system to schedule production runs. Once the order request is approved by upper management, the purchaser will choose a vendor and decide if a Purchase Order (PO) is needed. Practically, PO will not be required for minor purchases that are less than $1,000 such as office supplies, lunches etc. For those purchases, the purchaser will contact the preferred vendors to place orders and pay them with the American Express credit card. The Purchase Order request forms are then completed for filing purposes. If the purchase exceeds $1,000, a PO is created. The purchaser will select a vendor, send them the PO and receive a confirmation number. If the shipment is delayed, the purchaser will contact backup vendors for immediately needed parts. Receiving Deliveries from vendors are handled by the Receiving Department. The docking clerk checks Bill of Lading (BOL) and Packing Slip for correct shipments. All incoming deliveries with right addresses are received at the dock. After blind receiving the products, the raw material handler will compare the actual receipt of goods with the quantity of goods on BOL and packing slip. All shipments are subject to inspection for any defected items. The raw material handler will notify the...
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...PURCHASING PROCEDURES, E-PURCHASING, AND SYSTEMS CONTRACTING The purchasing department generates added value and profitability for the entire organization by communicating with suppliers to procure high-quality goods and services at the lowest cost and at the right time. This value is restricted by archaic and inefficient processes involving paper documents and time-consuming tasks. The E-Purchasing Solution automatically sends purchase orders, purchase requisition forms, etc… from SAP ensuring completion and timely approval of documents that are sent to your suppliers. You can easily track documents to verify they have effectively been sent ensuring that no order has been lost or misplaced. ERP FAX EMAIL Purchase order Purchase order copy Purchase order copy EMAIL Purchase department Production planning Accounting department Suppliers Purchase Manager Validation form by e-mail Automatic file Warehouse ERP FAX EMAIL Purchase order Purchase order copy Purchase order copy EMAIL Purchase department Production planning Accounting department Suppliers Purchase Manager Validation form by e-mail Automatic file Warehouse The Purchasing Policy The driving force behind any purchasing corporate policy considers the following objectives: 1. Spend corporate funds wisely. 2. Operate in a professional manner. 3. Purchase the right materials in the right quantities, at the right time and price, from the right source. 4. Practice the highest level of ethical standards...
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...significant evolution in purchasing. It has moved from the traditional clerical function that involved focusing the purchase of both goods and services at the least price possible, now it is a more sophisticated function that involves emphasis on creating value and making sure that the organization achieves a competitive edge over their competitors ( Gadde and Håkansson, 1994; Carter and Narasimhan, 1996; Krause et al., 2001; Rozemeijer et al., 2003; Cousins et al., 2006; González-Benito, 2007; Schoenherr et al., 2012). The turnaround has been created by increased understanding by the managers at the high levels of leadership I the companies that their firms are able to reap huge benefits and success in different aspects like through high-end purchasing strategies. Among the benefits that companies can yield from supplies include elevated financial performance (Carr and Pearson, 2002; González-Benito, 2007); innovative performance (Handfield et al., 1999; Van Echtelt et al., 2008); as well as an improvement in environmental performance (Bowen et al., 2001, Krause et al., 2009). There have been a number of developments in the industry, such as global sourcing, establishment of strategic alliances, as well as collaborative innovations with suppliers (Monczka et al., 2010; Schoenherr et al., 2012), which have facilitated a change in the role of purchasing. With the growth of interest by the practitioners on the performance benefits that are brought about by purchasing (Monczka et al.,...
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...Kudler’s Business Purchasing Marietta Esquibel BSA/502 January 21, 2013 Lise Hautzinger Kudler’s Business Purchasing According to (Nickel, McHugh, McHugh, 2010), “Purchasing is the function that searches for high-quality material resources, finds the best suppliers, and negotiates the best price for quality goods and services.” In the past, businesses dealt with many different suppliers so that if one could not deliver the products needed someone else could. However, today businesses depend on just one or two suppliers to deliver their goods on a regular basis. The internet has made purchasing much simpler for a business by providing internet-based services to allow purchasing for business products (Nickels et al. 2010). Utilizing the internet-based purchasing service, Kudler can find the best items at the best price (Nickels et al. 2010). Purchasing items online can reduce the cost of merchandise enormously by purchasing items that are need for the customers. . Kudler’s current purchasing plan for goods and services is limited only to vendors that have been approved by the company. The business purchasing process reflects a number of steps that need to be followed before a purchase order is prepared. The process begins with the purchasing function. At the end of each shift the purchasing function receives the sales data from each location and combines the results to determine if a purchase order should be submitted. There are business rules that are followed...
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...Purchasing a Home Purchasing a home is a major decision that must be well-thought-out. When consumers are deciding to purchase a home there are many dynamics that must be taken into consideration. Available substitutes that should be considered, complements that are necessary for when you purchase a home, and the price which can be affected by necessity as well as factors that could cause changes in supply and demand. There are many substitutes, or alternative, available for consumers who are considering purchasing a new home. Before deciding to make the commitment involved with purchasing a home, consumers should consider renting instead. With a set monthly payment and a contract that entails a much smaller timeframe, this option is better for some. Condominiums and townhouses are also substitutes for purchasing a home. These can be available for both renting and purchase, and the cost is quite a bit lower for these options. Mobile homes can also be a substitute for purchasing a house. Consumers must carefully weigh the options to see which alternative is best for them. Complements are also something that must be considered when purchasing a home. These are items that are necessary to be purchased along with a home. Insurance is a major necessity that must be purchased along with a home. This is not usually an option, but actually a requirement included in most contracts for home purchases. When one chooses to purchase a mobile home a complement that must be purchased is...
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...Title: Wal-Mart’s Purchasing Process To: Dr. Franklin Mitchell From: Mark Bieker Class: Class: AC 550 Accounting Information Systems Date: October 10, 2011 Introduction Wal-Mart was founded by Sam Walton in 1962 with the first Wal-Mart discount store opening in Rogers, Arkansas. The company was officially incorporated as Wal-Mart Stores Inc. on October 31, 1969. Currently, Wal-Mart has stores in 50 states in America and 15 countries worldwide, including Argentina, Brazil, Canada, Chile, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, and the United Kingdom. The growth of Wal-Mart over a period of 49 years is remarkable and has lead Wal-Mart to become the biggest retailer in the world. Wal-Mart also has a strong community presence in the areas the stores are located. Wal-Mart’s purpose is to save people money and to help them live better. In 2007, Wal-Mart changed its slogan from “Always low prices” to “Save money. Live better.” This slogan is demonstrated in the products that Wal-Mart sells. Wal-Mart will not be undersold. Wal-Mart caters to the low income and middle income people by offering goods at low prices. These low prices are demonstrated in the products Wal-Mart sells. The products include: food, drink, clothing, jewelry, electronics, automobile supplies, sporting goods, toys, and furniture. Basically, Wal-Mart offers customers a one stop shopping experience. In order to provide this variety of...
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...examinations in May/June 2015. As part of Office Administration syllabus, I am required to conduct a study for the completion of the School Based Assessment. I am kindly seeking you permission to visit your organization to find out the skills, duties and attributes of the Purchasing Clerk in the Procurement Office. The objectives of my research are to identify and discuss the skills, duties and attributes of the purchasing clerk. I would be very thankful for your kind co-operation. Yours Sincerely _____________ Student U86 Guyhoc Gardens South ruimveldt Greater Georgetown Guyana 19-09-2014 Dear Respondent, I am a fifth form student of Tutorial High School who will be writing the CSEC Examinations in May/June 2015. As a part of Office Administration, I am equired to conduct a study on skills, duties and attibutes of a purchasing clerk in the Procurement office at GT&T. I am kindy asking for your co-opertion in completing the attached questionnaire which will give me the needed dat. Please note, all data received will be used only for this purpose. Yours Sincerely ___________ student QUESTIONNAIRE 1. How long have you been employed in the position of the purchasing clerk? Under one year 1-5 years 5-10 years over 10 years 2. Do you laizze with any other department? Yes ...
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...Purchasing power parity dates back several centuries but was actually introduced after World War 1. Before the war, gold standards were used but after the war it was difficult to continue this way because speculators were afraid countries would ask for high revenues after devaluing their currencies. Therefore, Cassel developed Purchasing Power Parity during the international policy debate when they were discussing about the nominal exchange rates and what the appropriate level would be. Gustav Cassel has created the modern definition of purchasing power parity; ‘When measured in the same unit, the monies of different countries should have the same purchasing power and command the same basket of goods.’ In simpler terms it means, that in its absolute version, when expressed in a common currency the price levels should be equal worldwide. The theory is developed from the law of one price. The law of one price is the main building block of purchasing power parity. ‘The law states that once converted to a common currency, the same good should sell for the same price in different countries’ (Mkenda 2001 pg 6). That is for any good: P* = SP** Where; P* is the domestic price of the good P** is the foreign price for the good S is the domestic nominal exchange rate. (Mkenda 2001 pg 6-7). Under the law of one price it assumes that the there is perfect competition, hence no transportation costs, trade barriers or tariffs. Purely free trade, which makes the price of goods in...
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...INTM 443/543 PURCHASING FALL 2013 RESEARCH PAPER GUIDELINES The research paper will replace a final exam. The paper will be due by November 26th, submitted via Blackboard. Grades for papers received after November 26th will be reduced by 10 points per day (100 points maximum grade). Topics for the research paper may be one of the following: 1. A discussion with your point of view on a current purchasing or supply management issue, for example: - What should purchasing managers be doing to deal with fluctuating commodity prices in the future? - How has e-Procurement impacted Purchasing’s approach to negotiating with suppliers? - Should companies continue to use outsourcing as a key purchasing strategy? - What are companies doing to create sustainable purchasing and supply management processes and products? 2. Research on how a specific company has developed new strategies and/or techniques to its supply chain and supplier relationships. IBM, Wal Mart, or Proctor & Gamble might be good choices. 3. Research on a significant purchasing issue from the past. The story of I. Lopez who headed up Purchasing at both Volkswagen and then General Motors is a good example. Topics must be approved by me in advance. Submit a brief statement of the topic and what you intend to do in terms of fact gathering, literature investigation, etc. Topics should be submitted by October 1st. Your paper should be 8 -...
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...Electronic procurement (e-procurement) is the process of electronically purchasing the goods and services needed for an organization’s operation. It entails implementing electronic means to process publish exchange and store information concerning procurement without a paper medium. Hence it consists of publishing calls for tenders on the internet, sending out documents and specifications consultation files for companies, binding tender forms, etc 38 2.4.2 Factors/ drivers for adoption e-procurement In general a number of factors might hinder or influence the adoption of e- procurement in an organization including; inadequate technological infrastructure, lack of skilled personnel, inadequate technological infrastructure of partners, lack of integration with business, implementation costs, company culture, inadequate business processes to support e-procurement, regulatory and legal controls, security, co-operation of business partners capacity, inadequate e-procurement solutions, upper management support (Chipiro, 2009). Shakir et all, (2007) identified several driver/barriers for adoption of e-procurement; Economic: Little benefit to vendors, vendors’ concerns about costs, vendors’ fear of competitive bidding because of its adverse effect on price, insufficient internal resources to support e-procurement Operational: vendors’ concerns about required changes in work processes, lack of skilled personnel, particularly when the vendor is required to populate, update,...
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...WAREHOUSE ACTIVITY PROFILING: MINING FOR GOLD CHAPTER 2 Warehouse activity profiling • Warehouse activity profiling is the systematic analysis of item and order activity. • The activity profiling process is designed to quickly identify root causes of material and information flow problems, to pinpoint major opportunities for process improvements, and to provide an objective basis for project-team decision making. PROFILING MOTIVATIONS AND MINEFIELDS • Profiling Pays ▫ Done properly, profiling quickly reveals warehouse design and planning opportunities that might not naturally be in front of you. • You can drown in a shallow lake — on average ▫ If we are not careful to plan and design based on distributions as opposed to averages, the entire planning and design process will be flawed. That is why it is so important to go to the extra step to derive these profile distributions. As you start to look at the profiles of customer orders, purchase orders, item activity, inventory levels, and so on, the creative juices begin to flow for everyone on the project team. Everyone on the project team starts making good decisions and generating new ideas. In profiling, we are trying to capture the activity of the warehouse in pictorial form so we can present the information to management and so we can make quick consensus decisions as a team. A full, yet minimum set of profiles required to plan and design warehouse operations follows. This profile set is a synthesis of profiles...
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...Questions | 1. |Which one of the following is not a type of organizational data that is utilized in the procurement process? | | | | | |Client | | |Company Code | | |Storage Location | | |Purchasing Organization | | |Manufacturing Plant | | | | | |Answer: e Difficulty: Easy Page Reference: 2 | | |Section: Organizational Data Practice: | | 2. |What is a storage location? ...
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...Southeastern University Situation: * Southeastern University was one of the largest universities in the state. * Total enrollment of more than 25000 students and approximately 3500 staff. * Had 12 faculties at the university, over 20 continuing education diploma and certificate programs and 3 affiliated colleges. * Its purchasing department was centralized and it has a detailed policy. * Purchasing director Blake Hyatt, reported to the university’s VP of administration. * Maintained a list of approximately 1200 approved suppliers, adjusted every 3-5 years. * Follows a weighted average vendor selection system * Volume of purchases amounted to $75 M for goods and services each year. * The office of registrar handled about 160000 pieces of mails a year. * 50 to 60 employees(full time and temporary) were occupied in manually stuffing envelopes two days a month. * Walter Charbonneau, Manager of university registrar’s office bought the automatic folding machine; at cost -$14000 and supplier-not in the approved supplier list. * Heather Sloman, buyer in the purchasing department received quotes from 3 of her suppliers for a similar machine * .Q1- 10000,Q2- 11000 and Q3- 15000 +free 1 year service. Tasks: * What does Heather do? * Investigate unauthorized purchase * Talk with Walter about following university policy * Check with other suppliers on stock availability/lead...
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