Transcript Chapter 12: Purchasing, Inventory, and Quality Control

Purchasing, Inventory, and
Quality Control
Purchasing
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What is it?
Types
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Retailing
Manufacturing plant
Government
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Federal Acquisition Streamlining Act
Purchasing
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Why is it important?
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Just-in-time inventory
Trends/ Problems
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Supplier-base downsizing
Fully-integrated production networks
Not having right stock available
Purchasing
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One person in control
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Why?
Situations
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Expected change in price
Expected change in demand
Orders for specialty goods
Short supply of materials
Purchasing
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Choosing the Right Supplier
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What to look for
Where to look
Single supplier o multiple supplier?
Investigating Potential Supplier
Evaluating Suppliers
Purchasing
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Establishing an Effective Purchasing
Procedure
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Requisitioning Goods or Services
Triggers
 Retailing
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Making and Planning Purchase Orders
Purchase orders
 Standing orders
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Purchasing
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Establishing an Effective Purchasing
Procedure
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Paying Satisfactory Price
Receiving items
Role of Computers
Inventory
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“The property owned by a business or the
property so listed.”
Role of Inventory
Types of Inventory
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Finished items on display for sale
Batches of goods
Repair parts awaiting use
Supplies for use in office, store, or shops
Miscellaneous
Inventory
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80-20 rule
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Cost of Carrying Inventory
Determining When to Place an Order
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Implications
Costs of ordering
Lead time
Determining How Much to Order
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Economic Order Quantity
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Balance cost of placing an order with inventory-carrying
costs
Operations Planning and Control
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Variations in Demand
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Causes
How to Deal
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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
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Growing importance
What is quality?
Improving and Controlling Quality
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Establishing quality circles
Designing quality into the process
Installing a quality control system
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W. Edwards Deming
Quality & Control
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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
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Who can measure quality?
International Organization for
Standardization