Saturday, November 14, 2009


The shaping of business decisions by the purchaser of raw materials, components industrial equipment, and services for an organization. the amount of time devoted to the process will depend on a number of factors, including the importance of the decision, the cost to the organization of the decision, the alternative products or sevices available, and the purchasing officer's experience. three situations are recognized:
1) Straight rebuy: a familiar product (eg. stationery or electricity) is bought from a regular supplier.
2) Modified rebuy: looking around for a product with improved performance, perhaps reflecting dissatisfaction with current suppliers.
3) New task buying: thbuyer, on behalf of the organization, s attempting to fulfill a need or solve a problem that has not been previously encountered. The higher the risk factor involved in a purchase(e.g new production equipment, an innovative robotic machine), he larger will be the team forming the decision making unit (DMU) involved.