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Role Of Sourcing In The Achievement Of The Profit Objective Of Organization
[A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC]
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1.6 Research Questions
This study will attempt to provide answer to the research questions below.
1. What are the sourcing policies employed by the organization for the procurement of their materials?
2. What are the criteria used for source selection?
3. What are the criteria used by the organization for rating their supplier?
4. What type of relationship exist between the buying organization and their suppliers?
1.7 Definition of Terms
Sourcing: as the process of identifying, selecting and developing suppliers is a key purchasing activity.
Out
Sourcing: May be defined as a management strategy by which major
non-core functions are transferred to specialist efficient, external
providers.
Partnering: is generic and refer to arrange of collaborative relationships.
Intra-Company
Trading: applies to large enterprises and conglomerates where the
possibility arises of buying certain materials from a member of the
group.
Subcontracting: involves the total restructuring of an enterprises around core competences and outside relationship.
Tactical and Operational Sourcing: is concerned with low risk, non, critical items.
Reciprocity:
often referred to as selling through the order book is a policy of
giving preference to suppliers that are also customers of the buying
organization.
Single Sourcing: describes a situation where the buyers places all order with one single supplier.
Dual
or Multiple Sourcing: is a situation where the buyer shares the order
among two or more supplier especially where the order is large.
Categorical Plan: the method relies heavily on the experiences and ability of the buyer and the personnel of other departments.
International Sourcing: it means buying beyond national boarders of the buyer or importers country.
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