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Sometimes you are offered discounts or promotions when buying in large lot-sizes for re-stocking your inventory. However, the promotions or discounts might sometime come at the price of quality. What would you base your decision on if you were in this situation? What would your decision be?
Most probably not. Quality can't be compromised in oil and gas. We can use operational optimizaton technique to reduce the cost
Definitely no, low quality products obviously do not conform to standards and will cause problems in the future. The quality has to be right in order to have a good output. Quality, than price should be at the apex of any decision to buy.
No, will not buy low quality products in any case and certainly not in large quantity,as it defeats the purpose of saving as your funds will be stuck in useless inventory
Why should one buy a low Quality product when it comes for company standards, such low quality products not only effect loss but also effect company standard in future.
In purchase every person negotiate with vendor for good quality of product which will last for future and help to reduce future cost.
Low quality makes more losses then what we saves the cost.
Low Quality products no matter what the cost is, will eventually cause losses , the trick is to find the best quality for the best price....you may buy in large lots to cut down the cost but never buy lower quality products ...
I will buy the needed quality with the lowest cost
Lower quality but still satisfactory, yes. In which lot size, depends on how quickly the goods move from the WH, on warranty period, stock protection etc.
Pricing decisions are extremely important for the firm.Pricing is the only part of the marketing mix which brings in revenue.
Once a price has been set, consumers will often show a great deal of resistance to any attempts to change it.
Pricing frequently has important implications for the positioning of a product.
Price is the marketing mix variable for which a competitive response can be most quickly implemented.
As a small-business owner, you are likely on the constant lookout for ways to reduce overhead costs for your company. One potential strategy is to purchase items in bulk for your business. Buying in bulk reduces the cost per unit and can reduce how much you pay in the long run on supplies and products. Choose the items you buy in bulk wisely to avoid ending up with more than you need.
Some benefits of bulk purchasing are:
Upfront Fees
Buying in bulk could mean you have to pay fees upfront to access the items at a lower price. For instance, warehouse clubs, such as BJ’s and Sam’s Club, require businesses to have a membership before buying through their stores. Also, if you plan to sell any of the items, wholesalers could require you to obtain a resale license. Licensing fees need to be paid before you receive the state or county permit.
Spoilage
The type of goods you buy affects whether you should buy in bulk. Perishables, like grocery items, need to be used up fast to avoid spoilage. Certain food items do not spoil quickly and can be purchased in bulk to save items. These products include grains, nuts, pastas, spices and canned goods. Your variety is typically limited when buying in bulk. A single item is sold in large quantities to reduce per-unit price.
Extra Space Needed
Spacing considerations must be examined before deciding whether to purchase items in bulk. If you have plenty of storage space, bulk buying should not pose a problem. However, limited space could pose a problem for bulk buying. If you need to expand your space to house bulk products, you could end up losing money on the cost to rent the space.
Excess Inventory
If you choose products that are guaranteed sellers, bulk buying can prove advantageous. Review sales records and trends before placing bulk orders. Otherwise, you may end up with excess inventory. To get rid of the excess items, you may need to offer deep discounts on the products.
It depends on qaulity of the product and direct acceptance of the willing client. Otherwise I will reject the product to sustain the reputation of the company. Cost reduction matters but quality standards can not ignore.
Taking only total cost as a factor is extremly wrong. The purchasing department should assure that all quantities delivered no matter what type of industry is following the 5 R rules.
1-Right Quality,
2-Right Quantity
3-Right time
4-Right Price from
5-Right source
If any of the above points were not followed the end product will be affected.
Having a bad quality raw material will eventually result in a bad end product, that will affect on the reputation and performance of the company in market.
Same not having the right quantity and right time will affect on the delivery of the product.
Sure all management search to reduce the cost, but reducing the cost by reducing quality will lead to a bad product that will lead to decrease in sales and increase of waste and expiry.
The cost can be saved by working on the operation it self and optimizing it.
I try to buy high quality in low price to maintain the quality of the product to the consumer
