COLLEGE OF BUSINESS EDUCATION
BACHELOR IN PROCUREMENT AND SUPPLY
S/N
NAME
REGISTRATION NUMBER
1
NANZIA MBAGA
03.4243.02.01.2022
2
SIRA JULIUS MACHELA
03.5225.01.01.2022
3
PATRICIA GASPER
03.5574.02.01.2022
4
YAQOUB I MOHAMMED
03.5042.02.01.2022
5
SWAUMU JUMA
03.0585.02.2022
6
RACHEL P. MOKIMIRYA
03.4129.02.01.2022
7
NYAMIA M.CHILEMEJI
03.4129.02.01.2022
8
NAOMI DANIEL
03.7485.02.01.2022
9
YUSUPH IBRAHIM
03.8906.02.01.2022
10
ABDALLAH M ABDALLAH
03.1917.02.01.2022
QUESTION
Purchase orders or contracts will be performed to the satistaction of the buying organızation only
when the purchase description is written in the way it describes the quality requirement properly.
Explain clearly any five features and any five options available when preparing purchase deseriptio
Preparing Purchase Description Quality
Purchase orders or contracts will be performed to the satisfaction of the buying organızation only
when the purchase description is written in the way it describes the quality requirement properly.
Explain clearly any five features and any five options available when preparing purchase
descriptions
Five features of a purchase description that can ensure proper quality requirements are
met include:
Specificity refers to the ability of a test or model to correctly identify true negatives. In other
words, it is the proportion of actual negatives that are correctly identified as such (e.g. the
number of healthy individuals who are correctly identified as not having a disease). A test with
high specificity will produce fewer false positive results. In medical testing, a test with high
specificity is desirable, as it means that fewer healthy individuals will be misdiagnosed as
having a disease.
In purchasing, specificity refers to the level of detail or granularity in the specifications of a
product or service that a buyer is looking to purchase. The more specific the specifications, the
more clearly the buyer can define the product or service they need, and the less likely they are
to receive a product or service that does not meet their needs.
Having specific specifications can also help in the selection of suppliers and vendors, as it
allows the buyer to compare different options more easily and make a more informed decision.
For example, a company looking to purchase a new piece of equipment may provide specific
specifications such as weight, dimensions, materials, and capabilities in their request for
proposal (RFP) to ensure that they receive quotes and proposals for products that will meet
their specific needs.
In addition, specificity in purchasing can help to minimize the risk of cost overruns, and
improve the overall quality of the product or service received.
Measurement:
Including clear criteria for measuring and evaluating the quality of the product or service.
Refers to the process of evaluating and quantifying the value, quality, and performance of
goods or services that are being considered for purchase by a company or organization. This
can include activities such as conducting market research, analyzing supplier quotes and
proposals, and evaluating the cost and value of different products or services. Additionally,
measurement in purchasing can also involve monitoring and tracking the performance of
suppliers and the effectiveness of purchasing decisions over time.
Compliance:
Specifying any compliance requirements, such as industry standards or regulations.
Compliance in purchasing
Compliance in purchasing refers to the adherence to laws, regulations, and internal policies
related to the procurement of goods and services. This can include compliance with
government regulations and laws such as procurement laws, anti-corruption laws, and
environmental regulations, as well as compliance with internal policies and procedures, such
as those related to ethics, anti-bribery, and fair competition.
Ensuring compliance in purchasing can help organizations avoid legal and financial risks and
maintain a positive reputation. Compliance in purchasing can include activities such as
conducting due diligence on suppliers, implementing compliance training for purchasing staff,
and having a robust process for identifying and reporting potential compliance issues.
Warranty:
A warranty in purchasing is a legal guarantee provided by the seller to the buyer that the goods
or services being purchased will meet certain standards or perform as advertised for a certain
period of time. It is a type of assurance that if something goes wrong with the product or
service, the manufacturer will repair or replace it. Warranty can be of different types like
manufacturer warranty, seller's warranty, guarantee etc.
In purchasing, a warranty is an important consideration when evaluating the overall value and
risk associated with a particular product or service. It can also be a factor in the negotiation of
the terms and conditions of a purchase. Some organizations have specific policies and
procedures in place for managing and tracking warranties, to ensure that they are aware of the
terms and conditions of any warranties they have on hand and can take advantage of them if
needed.
Inspection:
Inspection in purchasing refers to the process of evaluating the quality and compliance of
goods or services before they are accepted by a company or organization.
This can include activities such as inspecting the physical goods to ensure that they meet the
required specifications, testing the goods to ensure that they are functional and meet
performance standards, and reviewing documentation to ensure that the goods or services
comply with relevant laws and regulations. Inspection in purchasing is an important quality
control measure that helps organizations ensure that the goods or services they purchase meet
their requirements and standards.
This process can happen at different stages of the purchasing process, it can be done at the
supplier's facility, at a third-party inspection agency or at the buyer's facility.
Inspection can be done by the buyer or by a third-party inspection agency on behalf of the
buyer to ensure objectivity. Inspection is an important aspect of the purchasing process as it
helps the organization to identify and correct issues early on, reducing the risk of defects and
non-compliance.
Five options available when preparing a purchase description include:
Request for Quotation is a document used in the purchasing process to solicit quotes from
suppliers for the supply of goods or services. The a request for quotation typically includes
detailed information about the goods or services being requested, including specifications,
quantity, delivery schedule, and any other relevant information. It also includes instructions on
how the suppliers should respond, including the format and deadline for submitting their
quotes.
The a request for quotation is used to gather information and compare prices, delivery dates,
and other terms and conditions from multiple suppliers, allowing the organization to make an
informed decision on which supplier to use. a request for quotation can be sent to a prequalified list of suppliers or open to any supplier who meets the requirement. Once the quotes
are received, they are evaluated and compared to determine the best value for the organization.
a request for quotation are commonly used in the procurement process, especially for goods
and services that are not purchased on a regular basis or for high-value purchases.
Request for Proposal (RFP): A document that solicits proposals from suppliers for a specific
product or service.
In purchasing, a
Request for Proposal (RFP) is a document that is used to solicit bids from potential suppliers
for goods or services. It includes detailed information about the goods or services that are
needed, the requirements for the proposal, the selection criteria, and instructions for submitting
a proposal. RFPs are often used for complex or high-value purchases, and are used to gather
detailed and accurate information from potential suppliers in order to make an informed
decision about who to award the purchase order to. An RFP process typically includes the
following steps:
Defining the requirement: The buyer identifies the need for goods or services and develops a
detailed specification or scope of work.
Issuing the RFP: The buyer sends the RFP to potential suppliers and invites them to submit a
proposal.
Proposal evaluation: The buyer evaluates the proposals received and selects a shortlist of
suppliers for further evaluation.
Contract negotiation: The buyer negotiates the contract terms and conditions with the selected
supplier.
Award of contract: The buyer awards the contract to the supplier that meets the requirement at
the best value.
Invitation for Bid (IFB): A document that invites suppliers to bid on a specific product or
service.
Invitation for bid in purchasing
An Invitation for Bid (IFB)
is a document used by businesses, organizations, and government agencies to solicit bids from
potential suppliers for goods or services. The IFB typically includes detailed information about
the goods or services that are needed, the requirements for the bid, the selection criteria, and
instructions for submitting a bid. Unlike a Request for Proposal (RFP) which is usually used
for complex or high-value purchases, an IFB is typically used for simpler purchases where the
specifications and requirements are already well-defined.
IFB process typically includes the following steps:
Defining the requirement: The buyer identifies the need for goods or services and develops a
detailed specification or scope of work.
Issuing the IFB: The buyer sends the IFB to potential suppliers and invites them to submit a
bid.
Bid evaluation: The buyer evaluates the bids received and selects a shortlist of suppliers for
further evaluation.
Award of contract: The buyer awards the contract to the supplier that meets the requirement at
the best price.
It's important to note that the process may vary depending on the organization, the regulations
or the country.
Catalog purchase: Making a purchase from a supplier's catalog without issuing a formal
document.
Blanket purchase order: A purchase order that covers a specific period of time and a specific
amount of goods or services.
Catalog purchase
A catalog purchase is a method of purchasing goods or services where a buyer selects items
from a pre-existing catalog of products or services offered by a supplier. The catalog typically
includes detailed information about the products or services, such as specifications, pricing,
and availability. Catalog purchases are typically used for routine or repetitive purchases, such
as office supplies or maintenance services.
The catalog purchase process typically includes the following steps:
Selection of supplier: The buyer selects a supplier from a list of approved suppliers or from a
pre-existing contract.
Review of catalog: The buyer reviews the catalog and selects the items they wish to purchase.
Placing the order: The buyer places the order with the supplier, either through an electronic
ordering system or by using a purchase order.
Confirmation and delivery: The supplier confirms the order and delivers the goods or services
to the buyer.
Payment: The buyer pays the supplier for the goods or services received.
It's important to note that the process may vary depending on the organization and the
regulations. Some organizations have specific forms or procedures for catalog purchases, and
some may require approvals from multiple parties before placing an order.
Limitations of economic order quantity
Economic Order Quantity (EOQ) is a model used to determine the optimal order quantity for a
product in order to minimize the total cost of ordering and holding inventory. However, there
are some limitations of the Economic Order Quantity model that should be considered when
using it.
Assumptions:
Economic Order Quantity model makes assumptions about the demand, lead time, and holding
cost that may not be accurate for all situations. It also assumes that demand is constant and that
the lead time is known and constant which may not be the case in some industries.
Ignores Quantity Discounts: Economic Order Quantity model assumes that the unit cost of
the item is constant, which may not be the case if quantity discounts are offered by the
supplier.
Ignores Safety Stock:
Economic Order Quantity model does not consider the need for safety stock to protect against
stockouts, which can result in lost sales and additional costs.
Inflexible:
Economic Order Quantity model assumes that the order quantity and reorder point are fixed,
which may not be the case if demand or lead times change.
One product at a time:
Economic Order Quantity model is based on one product at a time, so it may not be suitable
for businesses that carry multiple products.
Not considering the transportation and handling costs:
Economic Order Quantity model does not consider the transportation and handling costs,
which are a significant part of the inventory cost.
It's important to note that the
Economic Order Quantity model is a useful tool for determining the optimal order quantity,
but it is not appropriate for all situations and should be used in conjunction with other
inventory management techniques.