M2

Question 1

What are the generic procurement process stages?

Answer 1

Sourcing Stage
* - Identify needs
* -Create purchase request
* -Assess vendors

Purchasing Stage
* - Negotiate terms
* -Create orders
* -Receive and inspect goods and services

Payment Stage
* *-Approve invoice and arrange payment
* -Keep records**

Question 2

What are the advantages of centralized procurement?

Answer 2

-Avoids duplication or redundancy, which means lower cost
-More control and optimization of inventory
-Reduces staff
-Volume purchasing, greater discounts
-Lower delivery costs
-Centralized record keeping
-Computerized system, automated purchasing processes
-Centralized contact for suppliers

Question 3

What are the Disadvantages of centralized procurement?

Answer 3

-Can become to complex to run efficiently
-May cause delays if supplies need to come from central location
-May not be able to take advantage of local discounts
-May lead to under-investment and inefficiency