3.2 The Role of Procurement

Question 1

What is meant by the term “procurement”?

Answer 1

Selecting suppliers, establishing terms of payment and negotiating a contract.

Question 2

What is meant by the term “supply chain”?

Answer 2

All there businesses, people and activities that take part in the production processes from the start until the product gets to the consumer.

Question 3

Why may procurement be important to a business?

Answer 3

> good quality supplies in the right quantity and at the right time is essential to satisfy customers.
suppliers ability to supply goods and services in line with level of sales of demand.
reduction of unit costs of production and possibly prices if price is favourable.

Question 4

What are the 3 factors to consider when choosing a supplier?

Answer 4

> price.
quality.
reliability.

Question 5

What is meant by the term “logistics”?

Answer 5

The movement of goods, services and information throughout the production process.