ISSUES THAT MUST BE CONSIDERED IN BUYING DECISION

ISSUES THAT MUST BE CONSIDERED IN BUYING DECISION

     Buying is a part of purchasing activities. It is a tough tasks that must be done by a purchaser. As the decision maker, he must faces multiple goals in making the buying decision. The cost per unit, quality and lead time are some of the issues that a decision maker faces in making the buying decision. Usually, the purchasing decision must buy the right materials as acceptable cost and quality level within a reasonable lead time. So that, it is shown that become a purchaser, its a tough task that must be done.

     The first issue that must be considered in making buying decision is the cost. Cost is realy important in making buying decision. It is because, the cost per unit of material depends on the volume or amount purchased, the quality desired for the material and the desired lead time. The cost must be lower in order to gain profits. So that, to lower the cost the purchaser must procured in larger volume because it enables the firm to buy at discount. The discount will drive the material cost.

     The second issue that must be considered in making buying decision is the quality level. The quality level of material must meet the desired objectives as defined by the firm’s competitive prioritis. The lower the acceptable defect rate, the higher the quality level of material purchased. To achieve the quality goals, a firm must emphasizing the quality than the cost objectives. Six Sigma is the way to measure the quality. So that, firms must follow the Six Sigma in order to achieve the excellent quality.

     The last issue that must be considered in making buying decision is the lead time. The purchaser lead time will affect a firm’s flexibility and services to its own customers. A firm must shorter the lead time in order to get customer satisfaction. Shorter lead time can make the company responsive to external changes.

      For conclusion, there are three issues that must be considered in making buying decision. That are the cost, quality level and lead time. So that, as a purchaser, the three issues are necessary to considered in making the decision.