Purchasing, Inventory, and Quality Control

Purchasing What is it? Types Retailing Manufacturing plant Government Federal Acquisition Streamlining Act

Purchasing Why is it important? Trends/ Problems Just-in-time inventory Trends/ Problems Supplier-base downsizing Fully-integrated production networks Not having right stock available

Purchasing One person in control Situations Why? Expected change in price Expected change in demand Orders for specialty goods Short supply of materials

Purchasing Choosing the Right Supplier What to look for Where to look Single supplier o multiple supplier? Investigating Potential Supplier Evaluating Suppliers

Purchasing Establishing an Effective Purchasing Procedure Requisitioning Goods or Services Triggers Retailing Making and Planning Purchase Orders Purchase orders Standing orders

Purchasing Establishing an Effective Purchasing Procedure Paying Satisfactory Price Receiving items Role of Computers

Inventory “The property owned by a business or the property so listed.” Role of Inventory Types of Inventory Finished items on display for sale Batches of goods Repair parts awaiting use Supplies for use in office, store, or shops Miscellaneous

Inventory 80-20 rule Cost of Carrying Inventory Implications Cost of Carrying Inventory Determining When to Place an Order Costs of ordering Lead time Determining How Much to Order Economic Order Quantity Balance cost of placing an order with inventory-carrying costs

Operations Planning and Control Variations in Demand Causes How to Deal Allow operations to rise and fall Build-up inventory to level out Carry complementary products Do not expand facilities- just lose sales Scheduling Operations Controlling Operations

Quality & Control Growing importance What is quality? Improving and Controlling Quality Establishing quality circles Designing quality into the process Installing a quality control system W. Edwards Deming

Quality & Control Who can measure quality? Installing a quality control system Set standards for the desired quality range Measure actual performance Comparing their performance with established standards Make corrections when needed Who can measure quality? International Organization for Standardization