What is procurement?

The process of obtaining goods and services from preparation and processing of a requisition through to receipt and approval of the invoice for payment. It commonly involves 1. 2. 3. 4. 5. 6. 7. 8. 9. purchase planning standards determination specifications development supplier research and selection value analysis financing price negotiation making the purchase supply contract administration

10. inventory control and stores 11. disposals and other related functions. How Vendors are identified in business? 1. 2. 3. 4. 5. Information research from competitors Internet, yellow pages Exhibitions and promotional events (such as business summit) List of approved vendors in your business From commerce or expert colleagues in your industry circle or friend circle

Telling about product 1. 2. 3. 4. 5. 6. 7. Product/ variants Price Quality Reliability Servicing Cost to company Life cycle

Competitor analysis 1. 2. 3. 4. 5. Info of competitor Competitor product Comp. SWOT Strategies Market outlook

Product Costing 1. Direct cost a. b. 2. Labor Raw material

Overhead cost a. b. c. d. Office staff Electricity Maintenance Depreciation

Case framework 1. Cost- Benefit Analysis: If the question is about closure or accepting or rejecting particular offer then perform Cost-Benefit analysis 2. Internal Vs external factors: If a question is asked such that they say if firms profit have fallen over the years or risen over years 3. 4. Fixed and variable cost, Sunk cost or relevant cost Opportunity cost

5. Net Present Value: If decision is to be taken wether to buy a equipment or invest in new project etc then this analysis shall be used first 6. Porters five forces: Is the entry that a company want to enter is attractive? This type of decision can be made based on porter five forces 7. Product life cycle: If future growth aspect of a product is asked then this analysis shall be applied first 8. 9. 4Ps Product marketing 4Cs for analyzing customer or future industry- cost, customer, competitor, capability

10. 5Cs when to analyze a particular investor or an individual character, capital, condition, capacity, competitive advantage 11. Value chain analysis To analyze wether particular process is very important or what is most

important activity that creates value for a firm. 12. Core competency if a question is asked about restructuring or reengineering 13. Benchmarking if a particular parameter or value of system is to be changed then company can compare it with industry average 14. BCG matrix

M&A decisions We need to do value analysis. For finance firm value analysis can be done based on cash flow statement, balance sheet and income statement. Some Misc terms BPR- Business process reengineering