Case Study (Five Arrows Company)
Five Arrows Company has an immense wealth of experience in the manufacture of tires as it has been the leading pioneer in its areas of activity since its establishment in 1964.
The company now has a large market sector, and many of its customers prefer its products. However, there are many competitors trying to capture part of the company’s customers. Therefore, toto maintain its market sector, the company has decided to adopt several strategies in terms of its various production, marketing,, and financial operations. The procurement process was also an essential essential aspect of the company’s focus on reducing costs. The company has recently decided to try a new raw material that can be used as an alternative to the existing raw material as it is expected that the new material can raise the quality rates, which increases the life of the tires of the company.
If you are a purchasing manager, how do you deal with the following situations:
- Explain the mechanism of purchase demand (where the procedures start and the stages through which they go till they reach the purchasing management).
- What is the right purchase method that guarantees the lowest costs for the company and why?
- After the first quantity ran out, the company has decided to use this material in all its upcoming production operations. Explain in detail the mechanism of purchase (where do the procedures start and what are the stages which they go through to obtain the materials although there are a large number of producers of this material in the market)?