Purchasing Management

Running Head: PURCHASING MANAGEMENT
Purchasing Management
Name of the Student
Name of the University
Author Note

1PURCHASE MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Supplier selection criteria and issues related to the same..........................................................2
2.1 Single VS. Multiple sourcing...........................................................................................6
2.2 Peter Kraljic model of Risk-value....................................................................................7
2.3 Cost-ratio and linear averaging method...........................................................................8
3. Purchasing cost analysis.........................................................................................................8
4. Purchasing IT.........................................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................13

2PURCHASE MANAGEMENT
Introduction
Those shops which offer self –service to its end users with products such as food,
beverage and many others are referred to as the supermarket shops. The aim of this study is
to discuss about the selected supermarket named as NTUC Fairprice located in Singapore.
The main headquarter of this supermarket is situated in Singapore and the organization sell
products ranging from bakery, dairy, frozen food , meat, general merchandise, the alcoholic
beverages and many others. This particular supermarket deals in the food industry. It is
considered to be the largest retail chain in the entire Singapore. There are more than 50
outlets and almost 100 supermarkets across the whole country. The company aims at
becoming the iconic brand of the people of Singapore. The outlets of the supermarket consist
of Fair price finest, Fir Price express, Warehouseclub and others too1. The mission statement
of the company and its vision can be understood from the operations. It wants to become the
universal retailer and well understands its responsibilities towards the society, the economy
and the environment. They make their customers feel that they are being valued by the
company. The major competitors of the company are the Cold Storage supermarket, Giant
Singapore and Sheng Siong. This particular study aims at understanding the concept of
production management related to the selected supermarket. This report will also elaborate
the supplier selection criteria, the purchasing cost analysis and the ICT recommendation of
the organization.
1 Gadde, L. E., & Wynstra, F. (2018). Purchasing management and the role of
uncertainty. IMP Journal, 12(1), 127-147.

3PURCHASE MANAGEMENT
Supplier selection criteria and issues related to the same
2.0 Supplier selection and evaluation
The aim of purchasing is related to its CSR strategy and Fairprice’ CSR strategy
describes that the company is completely focused on the buying and selling of their products.
The organization also aims at maintaining the quality of their products offered to their
customers. In order to retain the quality of their products, they engage themselves in regular
meeting with the suppliers. They engage in conversations with the suppliers for producing
best quality products. The purpose of the purchasing policies of the company is to support the
procurement of the necessary resources out of the unsustainable sources2. The purpose of the
purchasing team is to ensure proper relationship with the suppliers having maintained the
quality of the goods3. The objective of the purchasing department is to work with the
suppliers which can improve the products and make it healthier by the company.
The linear averaging method will be used to select the appropriate supplier.
Supplier 1 Supplier 2
Quality rating (weight=
30%)
2 Jääskeläinen, A., & Heikkilä, J. (2019). Purchasing and supply management practices
in customer value creation. Supply Chain Management: An International Journal.
3 Martin, Christopher J., Sean B. McAdams, Haidar Abdul-Muhsin, Victoria M. Lim,
Rafael Nunez-Nateras, Mark D. Tyson, and Mitchell R. Humphreys. "The economic
implications of a reusable flexible digital ureteroscope: a cost-benefit analysis." The
Journal of urology 197, no. 3 (2017): 730-735.