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Purchasing, Inventory, and Quality Control

Purchasing, Inventory, and Quality Control

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Purchasing, Inventory, and Quality Control

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  1. Purchasing, Inventory, and Quality Control

  2. Purchasing • What is it? • Types • Retailing • Manufacturing plant • Government • Federal Acquisition Streamlining Act

  3. Purchasing • Why is it important? • Just-in-time inventory • Trends/ Problems • Supplier-base downsizing • Fully-integrated production networks • Not having right stock available

  4. Purchasing • One person in control • Why? • Situations • Expected change in price • Expected change in demand • Orders for specialty goods • Short supply of materials

  5. Purchasing • Choosing the Right Supplier • What to look for • Where to look • Single supplier o multiple supplier? • Investigating Potential Supplier • Evaluating Suppliers

  6. Purchasing • Establishing an Effective Purchasing Procedure • Requisitioning Goods or Services • Triggers • Retailing • Making and Planning Purchase Orders • Purchase orders • Standing orders

  7. Purchasing • Establishing an Effective Purchasing Procedure • Paying Satisfactory Price • Receiving items • Role of Computers

  8. Inventory • “The property owned by a business or the property so listed.” • Role of Inventory • Types of Inventory • Finished items on display for sale • Batches of goods • Repair parts awaiting use • Supplies for use in office, store, or shops • Miscellaneous

  9. Inventory • 80-20 rule • Implications • Cost of Carrying Inventory • Determining When to Place an Order • Costs of ordering • Lead time • Determining How Much to Order • Economic Order Quantity • Balance cost of placing an order with inventory-carrying costs

  10. Operations Planning and Control • Variations in Demand • Causes • How to Deal • Allow operations to rise and fall • Build-up inventory to level out • Carry complementary products • Do not expand facilities- just lose sales • Scheduling Operations • Controlling Operations

  11. Quality & Control • Growing importance • What is quality? • Improving and Controlling Quality • Establishing quality circles • Designing quality into the process • Installing a quality control system • W. Edwards Deming

  12. Quality & Control • Installing a quality control system • Set standards for the desired quality range • Measure actual performance • Comparing their performance with established standards • Make corrections when needed • Who can measure quality? • International Organization for Standardization