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The Roles And Importance Of Purchasing As A Business Activity In An Organisation
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1.1 DEFINITION OF KEY TERMS
- PURCHASE REQUISITION: This
is a precise document generated by an internal organization to notify
the purchasing department of items needed or the items it need to order.
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PURCHASE ORDER: This is a commercial document issued by a buyer (i.e
Purchasing department) to a seller (i.e Supplier) indicating types,
quantities and agreed prices for products or services the seller will
provide to the buyer.
- SOURCING: This refers to a number of
procurement practice aimed at finding, evaluating and engaging suppliers
of goods and services.
- EXPEDITING: This is a concept in
purchasing for securing the quality and timely delivery of goods and
services ordered for.
- PURCHASE DISCOUNT: This is an offer
from the supplier to the purchaser to reduce the selling price if the
payment is made within a certain period of time.
- PROCUREMENT: This concept purchasing mean to obtain or take possession of materials needed for smooth operation.
1.2 STATEMENT OF RESEARCH PROBLEMS
Every organization has the challenge of wanting to meet up with
consumers expectation by making the product available at the right time
and in the right quality while trying to meet up with consumers demand.
Some of the areas in which problem have been sought include.
i. How the purchasing department makes contribution to the profit goal of the organization.
ii.
How the purchasing department acquires input do they make use of the
normal purchasing process or there is a standard set by the
organization.
iii. Keeping a perfect working relationship with the other departments and the suppliers.
iv. Is the purchasing department playing any role in quality control?
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