Description
Using Information to Support Sourcing Decisions
The purchasing manager has provided the following information for your use:
Spend Category | Amount Thousands US$ | Number of Suppliers |
Production Machinery | 170 | 2 |
Maintenance | 20 | 10 |
Hardware | 3 | 10 |
Sheet Metal | 23 | 7 |
Electronic Components | 288 | 5 |
- Assuming that the amounts shown represent the total annual spend (Amount/Total Amount) calculate the percent of spend for each category.
- Classify each spend category as either low or high complexity and summarize your reasoning.
- Create a 2x2 Risk/Value matrix showing each of the five spend categories placed in either “High” or “Low” Risk group.
- Explain why you placed each item in the selected category.
Submit your assignment as an MS Word document.
Your assignment
- Must be 600-900 words (excluding title page and references page) in length, double-spaced and formatted according to APA style as outlined in the Ashford Writing Center. Contextual (Level One) headings must be used to organize your paper and your thoughts. Must include a title page with the following:
- Title of paper
- Student’s name
- Course name and number
- Instructor’s name
- Date submitted
- Must address the topic of the paper with critical thought.
- Must utilize a minimum of one scholarly and/or peer-reviewed source from the Ashford Library in addition to the textbook. Must document all sources in APA style, as outlined in the Ashford Writing Center.
- Must document all sources in APA style, as outlined in the Ashford Writing Center.
Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.
Explanation & Answer
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Running Head: MAKING EFFECTIVE PURCHASING DECISIONS
Making Effective Purchasing decisions
Student’s Name
Course Name and Number
Instructor’s Name
Date
MAKING EFFECTIVE PURCHASING DECISIONS
2
Procuring and making purchasing decisions plays a vital role in any business
organization. Establishing strategic purchasing and procuring practices can help a company
not only to maintain but also enhance the company’s competitive position especially in this
current business environment that is rapidly changing (Monczka et al., 2015). The number of
suppliers, restrictions to supply, specifications to certain product and availability of
substitutes are few among other factors that affect procurement. The information below was
provided by a purchasing manager.
Spend Category
Amount ($)
No.of suppliers
Production machine
170
2
Maintenance
20
10
Hardware
3
10
Sheet Metal
23...
