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Negotiation As A Cost Reduction Tools In Materials Purchases
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1.2 BACKGROUND OF THE STUDY
The
chosen research topic in negotiation as a cost reduction tool in
material purchase. A case study of Asaba textile mill Nigeria limited
Delta state.
It came about as of careful observations made by the
researcher on the ways business organizations in the manufacturing
sector of our economy have been operating.
This makes procurement
important, which definitely affects an organization profit position.
Most industries produce at a very high cost due to high price of
material in taken but thy sell only at production cost without making
profit in order to meet competition and remain in business.
Presently, text tile industries are becoming increasingly sophisticated with difficult product appearing Daily in our market.
These
are locally made in Nigeria and have to be sold along side with
imported wax product. All are competing for almost the same products.
The
relevance of negotiation is a cost reduction tool on materials purchase
in textile industries is that sales revenue is generated after sales.
However,
the firm can still make profit by ensuring proper negotiation on all
materials bought from numerous suppliers source both locally and
internationally from forgetting it can be seen that for textile
industries and Asaba Tex which is a new textile to survive in this
present business environment and economy, it needs a clear understanding
and effective application to techniques in all its purchases.
1.3 STATEMENT OF THE PROBLEM
In
184 the company started experiencing problems as a result of level of
production in the company till 1987 when the company was short down.
Bendel
state was divided into Edo and Delta state, and assets were share
including government parastatals. At the end of the sharing processes,
Asaba textile mill was share to Delta state.
In 1994, when Aiecdr
Ibrahim Kefas was the military Administrator of the state all government
owned Para stators including the textile mills were sold and church
Gate Nig Limited took over the management of the company with state
government controlling 20% shares.
In Nigeria economy is currently undergoing quite a number of problems.
Principal
among these are. The depreciation of the naira and the invariability of
foreign exchange, these combine to affect business positively or
negatively.
The textile industries have also added responsibility to
the present government policy of producing locally. Chemical cottons
tools and equipment. In order to discouraged importation which is due to
the current exchange rate in the exchange market. The textile
industries is now competing with imported wrappers like Hollandaise,
English wax and many others, which are either the same high quality.
From the above it can be seen that only efficient and innovative firms can survive and satisfy its customers.
This
makes life difficult for manufacturers who are now forced to be more
scientific in order to obtain results, which can be efficiently merged
with the organization goal.
1.4 RATIONAL OF THE STUDY
The
work will provide opportunity for the researcher to compare the
theoretical aspect of the importance of purchasing with the practical
aspect of it.
The study will also be of a benefit to the researcher
because it will widen her knowledge on negotiation as practiced in a
company as opposed to what is written in textbooks. Also it is a
pre-requisite for the award of Higher National Diploma (HND) in
purchasing & supply. For the company, it will serve as a reference
text and provide probable suggestions to identified problems.
Finally,
it will be a benefit to future researchers since almost all aspect of
negotiation will fully discussed in this study, hence it will serves as a
base for future studies.
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ABSRACT - [ Total Page(s): 1 ]This research work on negotiation as a cost reduction tools on materials purchases a case study of Asaba Tex Nig. Ltd. The scope of this research work covers every activity which has to do with negotiation problems, background to the subject matter, rationale for the study and the limitations of the study. The research reviews the related literature about the topic under discussion by gathering from distinguished authors and scholars, facts and opinions the finding of this study through the admi ... Continue reading---
