Purchasing and Supply Chain Management
6th Edition
ISBN: 9781285869681
Author: Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher: Cengage Learning
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Question
Chapter 11, Problem 1DQ
Summary Introduction
To determine: Why purchaser should evaluate the making cost of an item instead of evaluating the purchasing price.
Introduction: Supply management is the process of managing the suppliers and raw materials or resources that are essential for the organization’s operations.
Expert Solution & Answer
Explanation of Solution
Determine why purchaser should evaluate the making cost of an item instead of evaluating the purchasing price:
The purchase should evaluate the making cost of an item to determine the fair and reasonable price of the item. Thus, he can avoid the fraudulent action of a shopkeeper. The making cost of the product helps the purchaser to determine the quality of the product. It is applicable for all manufacturing products.
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Students have asked these similar questions
Why should a purchaser evaluate the cost of making an item instead of simplyevaluating the purchase price? Is this true for all types of products? Why or why not?
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How does the price of the product compare to the prices of similar products in the category?
Chapter 11 Solutions
Purchasing and Supply Chain Management
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