Examples of Purchasing in the following topics:
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- For example, a purchasing department will place orders as requirements become known.
- Purchasing is the formal process of buying goods and services.
- Most organizations use a three-way check as the foundation of their purchasing programs.
- These departments may be designated as any of the following: purchasing, receiving, accounts payable or engineering, purchasing and accounts payable, or plant management.
- For instance, a purchasing department will place orders as requirements become known.
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- This type of relationship portrays the buyer purchasing a product out of routine or pattern.
- In a functional relationship, previous purchases will often influence later purchases.
- For example: A buyer for a school is in charge of purchasing all items that will be necessary for the cafeteria to function.
- The buyer must purchase snacks, candy, meat, and drinks, just to name a few.
- This particular buyer uses a wholesaler to purchase all necessary items.
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- Companies generally use operating funds to finance their purchasing program.
- Most organizations use a three-way check as the foundation of their purchasing programs.
- These departments can be purchasing, receiving, and accounts payable; or engineering, purchasing, and accounts payable; or a plant manager, purchasing, and accounts payable.
- Historically, the purchasing department issued purchase orders for supplies, services, equipment, and raw materials.
- Negotiating is a key skill in purchasing.
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- For example, if an organization makes furniture, some of the operations management decisions involve the purchasing of wood and fabric, the hiring and training of workers, the location and layout of the furniture factory, and the purchase of cutting tools and other fabrication equipment.
- If the organization makes good operations decisions, it will be able to produce affordable, functional, and attractive furniture that customers will purchase at a price that will earn profits for the company.
- In another example, the owners of a restaurant must make important decisions regarding the location, layout, and seating capacity of the restaurant, the hiring, training, and scheduling of chefs and servers, the suppliers of fresh food at the right prices, and the purchase of stoves, refrigerators, and other food preparation equipment.
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- Routine Response Purchasing Behavior: Examples of items purchased include soft drinks and candy bars.
- Extensive Decision Making Purchasing Behavior: examples include cars, apartments, and electronic equipment.
- Sometimes purchase intention does not result in an actual purchase.
- The marketing organization must facilitate the consumer to act on their purchase intention.
- The choice to purchase the product and then finally the actual purchase of the product. [6] This shows the complete process that a consumer will most likely, whether recognisably or not, go through when they go to buy a product.
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- The Fourt-Woodlock equation is a market research tool to describe the total volume of consumer product purchases per year based on households which initially make trial purchases of the product and those households which make a repeat purchase within the first year.
- The left-hand-side of the equation is the volume of purchases per unit time (usually taken to be one year).
- TU ("trial units") is the number of units purchased on this first purchase occasion.
- RR is the repeats per repeater ( the number of repeat purchases within that same year).
- RU is the number of repeat units purchased on each repeat event.
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- Counter purchase: Party A sells salt to Party B.
- Party A promises to make a future purchase of sugar from Party B.
- Switch trading: Practice in which one company sells to another its obligation to make a purchase in a given country.
- Counter purchase: Sale of goods and services to one company in aother country by a company that promises to make a future purchase of a specific product from the same company in that country.
- Offset: Agreement that a company will offset a hard currency purchase of an unspecified product from that nation in the future.
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- Sampling involves providing a sample of a consumer product to consumers so that they may try said product before committing to a purchase.
- During the product promotion process, sampling involves providing a sample of a consumer product to consumers so that they may try said product before committing to a purchase.
- It is also possible to purchase products in small "trial size" containers.
- While placement and word of mouth impact future purchases, sampling can create an almost immediate impulse purchase.
- Samples are either free handouts, trial sizes, or coupons for consumer products provided to consumers in the hope that they will eventually purchase the product.
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- In fact, motors use up so much electricity that the amount they consume over their lifetime always costs more than the price of the motors themselves (some motors actually consume, in electricity costs, the amount of their purchase price every few weeks).
- (Hawken, Paul, Lovins, Amory, and Lovins, Hunter, Natural Capitalism) A new electric motor purchased for $1,500, for example, can cost as much as $13,000 a year to run and a typical 100 horsepower AC induction motor purchased for $5,000 will use as much as $35,000 worth of electricity in a year.
- That's about six times the purchase price of the motor.
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- Overbuying includes: (1) purchasing equipment that will only be used once or twice (in this case, leasing may be a better option), (2) buying machinery that produces or performs far more than what is needed, and (3) taking on board anything that requires more investment in time, input and money (i.e. energy) than what is obtained in return.
- To help avoid these pitfalls, the following questions should be asked before purchasing any piece of machinery or equipment: (Scott, Jonathan T., Managing the New Frontiers)
- Is the full life-cycle cost of the machine being considered rather than its purchase price?
- Inefficient, energy-hungry machines can consume their initial purchasing cost in energy per week.
- The first reveals the machine's purchase cost.