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Sourcing For The Most Suitable Supplier For Raw Materials In Manufacturing Organizations.
[A case Study of Nigeria Bottling Company Ilorin]
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1.8 DEFINITION OF TERMS
SOURCING: The identification or development of suitable sources of supply, the systematic investigation and comparison of such sources, the sourcing decision, which help supplier to patronize, how many to use on a given item, how to allocate available business, what term to do business on.
RIGHT SOURCES: this is the supplier that can meet the requirement of the buyer at any period time.
PROCUREMENT: This term is defined as a whole process whereby all classes of resources (materials facilities and services) required are obtained.
SUPLIER DEVELOPMENT: this is the process where the buying company assist small or new supplier for them to be able to supply product it’s required in the correct quantity, quality and correct delivery schedules.
CARRYING COST: this comprise of all cost that are incurred in holding a given level of inventory.
ORDER COST: This is the total cost incurred in the process of acquiring a given level of inventory.
ACQUIRES COST: This comprises of cost of carrying stock and cost of placing order.
PROCESSING: Sometimes called expediting, chasing or follow-up. An important part of the suppliers management task is to ensure that goods and services are received as at when required.
Many delivery problems can be avoided by sound selection, even the most careful selected sources sometimes prove unreliable in meeting agreed schedule.
LEAD-TIME: This is the time when an order is fully recognized to the time when the goods are delivered. We have internal and external lead- time.
PRICE ANALYSIS: This is the process of examining of seller price without evaluation and examine of separate elements of the cost and profit making up the price.
PUBLISHED PRICE LIST: is a form of quotation that provides prices of standard commodities treated.
RECIPROCITY: When buyers give preference to suppliers who are also customers, they are engaging in a practice known as reciprocity.
SPECIFICATION: This is very important. it is the detailed statement providing a complete description or list of characteristic or requirement laid down for materials, components, processed or services.
NEGOTIATION: This is an agreement procedure aimed at decision making.
POLICY:-This is a general statement or understanding which guides or channels the thinking and action of management in decision making. RIGHT QUANTITY: in purchasing, this term refers to the volume, size amount which can be most economically purchased of any item at a particular time.
VENDOR: This means suppliers who: supply: goods or services to the buying company.
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