Case study - Contexts of Procurement and Supply

Question : Explain how regulation impacts on the purchasing activities at BRB

Regulation impacts on the purchasing activities at BRB are followed

Making specification of filter: For low emission , BRB have to purchase specified filter which is pass the certification process and ensure air quality of the city .

Select the supplier : for regulation impacts BRB has to select the supplier who is capable to supplier the preferred air filter.

Certification : for the regulation , BRB need certificate for the supplied filter. Withour certificate , BRB may have to pay £ 200 per day to enter in the low emission zone.

New product innovation: for regulation and update the service , BRB have to need frequently modification of digitally recorded commentary in several language and other high wear parts replaced.

Spot purchase: for maintaining the regulation and continue the service , BRB need spot purchasing of a lots of parts and others materials

Cost increasing : for spot purchasing the spare parts and other materials , cost in increasing day by day

Time wasting : due to spot buying and miss communication , BRB received some invoice with out purchase order , which waste time of both buyer and supplier.

Question : Discuss the benefit to BRB of Astra purchasing the filters and ensuring their certificate

Financial benefit: without filter and ensure the certificate , BRB can not continue its business as a tourist bus company. They have to pay £ 200 per day to enter in the low emission zone which may cost a lot. There fore , Astra purchasing of the filters and ensure certificate , BRB are financially benefited.

Enhance profitability : By ensuring certificate , BRB can provide as sightseeing tours throughout the capital city using a red open top double -decker bus which is enhance the profitability of the company.

Environmental benefit : using filters and ensuring certificate BRB is producing low emissions which is ensure the air quality of the city. Thus filters and certificate help to keep the city environment air pollution free.

Business benefit : for the certificate they can continue the business whithour any service penalties , So this is a business benefit for BRB

reputation benefit : Purchasing filters and ensuring certificate BRB can operate the Highly regulated Tourist bus service in the capital city .this service enhance the attractiveness of the city and ensure tourist satisfaction which is a reputation benefit for BRB.

Ensure tourist satisfaction : Using filters and ensuring the certificate , BRB's vehicle can operate the service thoughout the city and ensure the satisfaction of the tourist.

Safe and sustainable bus service : they are offering safe and sustainable bus service using the filters and certificate.

Enhance the attractiveness of the city: BRB's tourist bus service ensure tourist to visit the important place of the city in a safe and relaxed way which ensure tourist satisfaction and enhance the attractiveness of the city.

Question : discuss advantage and disadvantage of BRB of spot buying

Spot Buying : Spot buying is the practice of buying to meet immediate requirements, rather than for stock or to meet future demand. Frequent orders are raised at the prevailing price at the time the order is placed. When a commodity price is falling, spot buying may minimize total expenditure.

The advantages of a spot buying
A spot purchase may be particularly suited to circumstances where flexibility of provider is required. Additional potential benefits include:

• Promotes choice and flexibility in responding to changing needs
• Supports the development of more individualized services and price and enables commissioners to specify individual outcomes for service users
• May allow for closer matching of resources to individual needs
• Represents a low risk purchasing strategy in striking a balance between other contract options that are available to commissioners
• Provides an environment where it is easier for commissioners to shift to new supplier
• May present an easier route than other contract options for new providers to enter the local care sector.
  

The disadvantage of a spot buying
A significant use of spot contracts is not conducive to care sector stability. Other potential disadvantages include:

• The lack of guarantee offered to providers can be detrimental to service consistency and continuity;
• Insecurity of supply for commissioning organisations
• Lack of security for providers, which may result in a lack of capital investment
• Potentially higher prices arising from a lack of economies of scale
• An inhibition about closer working relationships between commissioners and providers
• Monitoring is difficult in an environment where there is a high volume of spot contracts
• Spot purchase are deficient as a planning tool
  
• It is difficult to predict the exact time period and strike price of the products. This can make it more difficult to achieve goal for the business. Fortunately, different types of SPOT options help mitigate this disadvantage.
  

Case Stady Anchoring , one kind of Business negotiation

Key Point :

Anchoring is a tactics of negotiation which are widely use in selling premium branded automobile products. Seller use anchoring tactics for the customer and using this tactics people are bias to purchase the products , Using anchoring seller also make a big margin and buyer also happy to fill that they are purchase the products with a big deal.

Automobile Manufacture sell their almost brand new cards to the customer, priced 15-20 percent less then the then brand new car which is the implementation of anchoring tactics.

This is a collaborative or interest – base negotiation which are figuring out both parties interest and this is a win- win situation for the both parties. Purchasing a nearly brand new car with 20 percent less, buyer are highly satisfied and felling that this is a great deal, on the other hand supplier are also happy that they make decent margin.

For anchoring the negotiation we have to price the table first , the price is more then the actual value , after some negotiation other party may accept the deal , they are fill better that they get a huge discount and we are pleased we also get our margin.

Analysis:

This is a tactics which make the negotiation easier and can easily make a deal with buyer and supplier

Buyer came to table with a maximum price which are their walk a way points.

Seller came to table with the minimum selling price , this is also the walk a way point for seller.

Both parties are try to negotiate the price and other condition , after they relived to get just enough , they may make the contract.

This is collaborative negotiation , both parties work together to try or find our an outcome which meet the clearly stated need of both parties as far as possible. This facilitates learning , generates more creative options and encourages trust.

Reflection :

This is very relevant to understand the negotiation process, buyer and seller level of satisfaction commitment and conclusion .

This is illustrate the negotiation process of high value premium brand brand new and used but almost brand new automobile.

This is a perfect example of collaborative or interest-based negotiation where customer satisfaction are also important issue.

This is highly integrated procurement procedure where buyer and seller are gain their objectives.