7.6 STRATEGIC PROCUREMENT OR PURCHASING STRATEGIES
We have studied the Purchase Cycle. We have also studied the rights of Purchasing.
It is now very clear that different items need different focus and attention. The items need to be classified once again to determine the Purchase Strategy for an item or group of items.
7.6.1 Traditional Classification
ABC - Annual consumption value
Uses: Selection of items for Cost reduction/Inventory level reduction/New vendor development
VED - Criticality of stocking
Uses: Adequate stocking/Vendor distribution system/Vendor development/Standardization
FSN – Frequency of receipts and issues
Uses: Warehouse and Retail Stores Layout/Disposals of obsoletes
HML – unit value
Uses: Safety and security/Special storage/Cross ...
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