Purchasing and Supply Chain Management
6th Edition
ISBN: 9781285869681
Author: Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher: Cengage Learning
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Chapter 2, Problem 3DQ
Summary Introduction
To explain: The contributions a purchasing department can make to the corporate strategic planning process.
The purchasing process:
The purchasing process encompasses all the activities as shown below:
- Identification of user requirements.
- Evaluation of the user needs effectively and efficiently.
- Identification suppliers who are capable to meet the demand.
- Development of agreement with those suppliers.
- Development of the ordering mechanism.
- Ensure that the payment process occurs promptly.
- Ascertaining that the needs are effectively met and
- Driving continuous improvement.
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i). Complete the table assuming a Level production plan.
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In the following sawtooth inventory profile diagram, two inventory plans with different order quantities (Q) and different frequencies of delivery are shown; order quantity for Plan A = 200 units and Plan B = 50 units.
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ii). There is a stark difference in the composition of the total costs of Plans A and B. Explain this difference and why it occurs. Use the breakdown of costs for each plan to help illustrate your answer.
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Purchasing and Supply Chain Management
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