Purchasing Management Assignment 1

Purchasing Management Assignment 1

Table of contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Part 1: Literature Review.................................................................................................................3
Part 2: Orientation............................................................................................................................5
Importance of purchasing in business..........................................................................................5
Purchasing at Walmart.................................................................................................................5
Future challenges for purchasing.................................................................................................6
Added value of purchasing to Walmart.......................................................................................6
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................7

INTRODUCTION
MAIN BODY
Part 1: Literature Review
The role of the purchasing power as stated by the Gilboa and Mitchell, 2020, discussed in
the journal that the companies invest more than half of the revenue into purchasing the services
and products. The long term competitiveness of the company can be ensured by the constructive
as well as efficient relationships with the suppliers. The role of the purchasing is divided into two
parts that is strategic purchasing and order function. The purchasing in the company can be
defined as the management of resources that are external in such a way that the knowledge,
capabilities and goods are secured in all the favourable conditions. The procurement in the
company is defined as the activities that are included in the process of products to get to final
destination from the supplier.
Definition of sourcing by Van Den Brink, 2019, is managing the best source of supply on
the worldwide basis through selecting, finding and contracting. Along with this the definition of
the purchasing management is activities that help in aligning the relationships with the suppliers
to the strategies and interest of the business.
The definition of the supply chain management according to the Khan, Haleem and
Khan, 2018 is the management of all the activities that meet the expectations of all the end users
and the activities, knowledge, financial resource and information involved for transformation of
the products and services from raw materials suppliers to component supplier.
According to Kaufmann, Wagner and Carter, 2017, the decision-making in purchasing
and the process of purchasing involves the buying behaviour of the organisation that includes the
professional purchasing, inelastic, fluctuating demand, derived demand, and limited number of
customers, geographical concentration as well as the large order of quantities. The variables that
impact the buying process are strategic importance, degree of risk, purchasing effect on the
existing routines, product characteristics, collection of money involved and role of the
purchasing department. Montague, Gazal and Wiedenbeck, 2019states the aspects of the
purchasing process that consist of the process approach, combining different skills with the
knowledge and expertise and the business expertise. The three types of purchasing situations are
described are new task situation, modified rebuy and straight rebuy. The new buy situation has
totally new products from an unknown supplier and has highly uncertain with the outcomes. The