Define procurement - ANSWER-Procurement is the process of obtaining
goods or services through following a process that includes identifying the
need through to goods or services being delivered.
Define purchasing - ANSWER-Purchasing is the act of physically ordering and
buying something.
Define supply - ANSWER-Supply is the infrastructure which ensures
goods/services can be delivered
What are constructional works - ANSWER-Constructional works include both
goods and services, such as concrete, architecture
What are stock items - ANSWER-Stock items are ones we can hold inventory
of such as raw materials, components
,Define value - ANSWER-Value is the worth of something, the difference
between what we pay and what a potential customer is willing to pay
What is a good - ANSWER-A good is a tangible physical item such as raw
materials, components
What is a service - ANSWER-A service is an intangible item such as cleaning,
training
What are primary activities in Porter's value chain - ANSWER-Inbound
logistics
Operations
Distributional logistics
Marketing & sales
Services
What are support activities in Porter's value chain - ANSWER-Firm
infrastructure
Human resource management
Technology development
,Procurement
What is a capital expense - ANSWER-expenses incurred for future benefit
which depreciates over time, such as machinery, building
What are non-stock items - ANSWER-Non-items are ones which cannot be
held, such as capital procurements, services
Outline what is meant by direct and indirect procurements - ANSWER-Direct
material - traceable to units of production such as wood into furniture
Indirect material - not traceable to specific units such as sanding paper into
sanding machinery
Direct labour - directly involved in the making of units
Indirect labour - Indirectly involved in the making of units such as
maintenance engineers
Direct expense - variable costs which are rare such as paying royalties on
each unit produced
Indirect expense - fixed or step-fixed, such as factory rent
, What is an operational expense - ANSWER-the day-to-day running costs of a
business such as office supplies, wages
What are the key features of capital procurements - ANSWER-Charged to
capital account
Procured for a long time period and long lifespan
Tend to be high-value assets
Procurement involves complex requirements and many stakeholders
Involves developing a business case
Less frequent and irregular
What are the key feature of operational procurements - ANSWER-Financed
from resource budget
Purchased for short-term consumption
Tend to be low-value
Less complex repeat spends
Straight-forward, following pre-set budgets
What are the key features of services procurements - ANSWER-Intangibility -
specifying services levels is challenging
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