Page 157 - DMGT525_MATERIALS_MANAGEMENT

Materials Management Neetu Singh, Lovely Professional University

Notes Unit 11: Purchasing Research

CONTENTS
Objectives
Introduction

11.1 Meaning of Purchasing Research
11.1.1 Price Forecasting
11.1.2 Techniques of Price Forecasting

11.2 Forward Buying
11.3 Make or Buy Decision
11.4 Summary
11.5 Keywords
11.6 Review Questions

11.7 Further Readings

Objectives

After studying this unit, you will be able to:

 Discuss Purchasing Research
 Explain Price Forecasting
 Discuss Forward Buying
 Elaborate Make or Buy Decision

Introduction

Previous unit dealt with the concept of value analysis, its application and organization. It also
discussed the functional analysis system technique. In this unit you will study about purchasing
research and price forecasting. This unit will also discuss forward buying and make or buy
decision.

11.1 Meaning of Purchasing Reserach

One of the important functions of purchasing is that of purchasing research. In many large and
well managed organizations there is a group of people doing formal purchasing research. This
is not only the study of substitute materials to get over a recent problem of procurement, but
also a long range study of the requirements of the present as well as anticipated products.
Purchasing research, understandably, also has the task of studying the trends and future forecasts
of the cost of various input materials; and also that of the general economic conditions, industrial
conditions, and national and international developments of interest for the task. Purchasing
research will have to interact with the R&D and engineering departments of the company on a
continual basis.
The idea is that when the crunch comes in the future, the company should not crumble under the
pressure. The other tasks of purchase research include: make or buy studies, studies of alternative

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