33:010:275 Lecture Notes - Lecture 2: Costco, E-Procurement, Supplier Diversity

• School: Rutgers University
• Department: Accounting
• Course: 33:010:275
• Professor: S Sahay

Document Summary

Purchasing- obtaining merchandise, capital equipment, raw materials, services, or maintenance, repair, and operating (mro) supplies in exchange for money or its equivalent: key business function for acquiring materials, services, and equipment. Merchants- wholesalers and retailers who pur(cid:272)hase for resale (cid:894)cost(cid:272)o, a(cid:373)azo(cid:374) (cid:895) Contracting- term used for the acquisition of services. Primary goals of purchasing are: ensure uninterrupted flows of raw materials at the lowest total cost, optimize customer satisfaction. Purchasing contributes to these objectives by: actively seeking better materials and reliable suppliers, work closely with and exploiting the expertise of strategic suppliers to improve quality and materials. Involving suppliers and purchasing personnel in new product design and development efforts. The financial significance of supply management: purchase spend, the money a firm spends on goods and services. Inventory turnover effect: increased inventory turnovers indicate optimal utilization of space and inventory levels, increased sales, avoidance of inventory obsolescence