Page 333 - DMGT501_OPERATIONS_MANAGEMENT

Unit 14: Purchasing

QFD: Quality Function Deployment Notes
Value Analysis: Examination of each procurement item to ascertain its total cost of acquisition,
maintenance, and usage over its useful life.

14.8 Self Assessment

State whether the following statements are true or false:
1. About 30 percent of the total production costs are incurred as overhead costs.
2. There is a two way interaction between purchasing and other departments within the
organisation but one way interaction with the seller.
3. It is the not the responsibility of the purchasing department to check the levels of inventory.
4. The purchasing department has a major role to play right form the ideation stage of new
product development.
5. The value analysis largely plays on the quality value relationship.
6. It is very convenient for any firm to switch from one type of purchasing system to another.
7. All the suppliers should be granted equal considerations irrespective of the size of order.

Fill in the blanks:
8. The way to solve problem of different reporting procedures of the employees of different
departments is ..........................

9. Purchasing and legal department have a .......................... interaction.
10. In most of the organisation purchasing has a .......................... role to play.
11. Suppliers need .......................... to put forward their candidature on the global business
scene.
12. In organisation where .......................... purchasing is done, corporate offices have less control
over branch offices.

14.9 Review Questions

1. "Purchasing is a key competitive weapon". Discuss
2. Why are purchasing decisions so important in an organisation? Discuss its importance in
supply chain management.

3. Explain the two way interaction between purchasing and other departments. Can there be
a one way interaction also?
4. How can purchasing be from internal supply chain? What is the importance of such type
of a supply chain?
5. "Purchasing has a dual role to play in an organisation". Substantiate.
6. Explain the importance of supplier monitoring. Determine the role of supplier in
purchasing.
7. "A make or buy decision should be viewed as an investment decision" Explain the rationale
behind the statement.

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