Answer to Question #271972 in Marketing for Khanya

Question

Using examples, explain the importance of purchasing and supply in a company like Drip footwear.

Answer 1

Importance of purchasing and supply in a company.

1. Reducing cost and improving savings

In a company, the cost sales draw the bottom of its success. The purchasing committee puts into consideration trading quality before deciding on the purchase the company should make. The purchase should be relatively lower to allow for savings. For example, in Drip footwear, the quality of raw materials should be of good standard cheaper.

2. Ability to negotiate successful contracts.

The procurement committee is tasked with the job of negotiating contracts of purchase and supply. With high negotiation skills, the company can secure long term contracts with customers and build good relationships in business.

3. Serious risks.

Ability to understand potential risks which the company may face in the process of doing business. The risk management council should be able to detect risks and strategize on how to prevent their occurrence. For example, the risk management council should be able to detect the trend of economic development in the area of operation to prevent losses when the consumer income goes low.