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INSTANT PROJECT MATERIAL DOWNLOAD
Study Level: BTech, BSc, BEng, BA, HND, ND or NCE
1.1 BACKGROUND INFORMATION
The “Purchasing” is widely used in industry, commerce, public corporation and management to donate the act of and the functional responsibility for procuring materials, supplies and service. The research is aware that most serious problem facing the world today are the scarcity and the growing trend toward higher cost of materials and service. But it is amazing that purchasing, which can be so vital to an organization, yet many still little understood. Although the function spend a signification portion of every income of an organization, yet many still look upon it as little and not more, than a clerical or routine activity. Too many people assumed the function is just simple exercise of processing requisition and placing order. Professional purchasing however, is not a clerical task. However, in a narrow sense and considering the topic make by decision as an important tool for increasing profit ability, the term determines the need, selecting the suppliers, arriving at proper price, term and condition issuing the order, follow up to ensure proper delivery. The basic element involve in the performance of the purchasing function at Okin biscuit manufacturing industry limited, Igabo. Offa are obtaining the proper equipment, material, supplies and service that are needed, were they are needed at the right time , at right place, in the right quantity and quality, from the right source through the minimum effort and cost taking into consideration make or buy decision as an important tool for increasing profitability at Okin biscuit manufacturing industry ltd, Ijabo, Offa. Before any purchasing order is raised at Okin Biscuit manufacturing industry L.T.D, decision as to be made were the item in question is to be purchase or .
Manufacture internally as it will be necessary. This decision regarding what to purchase or make essential the decision of top management. In practice, the decision often seem to be taken as require by design, production or purchasing people acting together or separately with no writing policy guide and no apparent provision for periodic review. There is need to distinguish between decision and strategic decision. Make or buy decision taken at department level are those, which simply apply, to the existing policy they are tactical decision, when a change in the policy is invariably considered, it is then these decision are taken at higher level were the company’s strategy is decided. Considering make or buy decision, it is worth nothing that 60% of company’s annual budget is spent by the purchasing department, and million of naira are lost annually as a result of purchasing items. It would therefore be more economical of purchasing item. It would therefore be more economical to decide whether to make or buy. This was the conclusion of cullintin’s research first published in 1942 and subsequent investigation do not reveal that there is considerable improvement ever since culminating found that make or buy decision often attract less attention than needed and it tend to be taken on the basics of incomplete or inaccurate information and for year without being re-considered, although they have change significantly,
1.2 STATEMENT OF RESEARCH PROBLEM
General problem in this research includes whether to made or buy in the organization set up, this has to be given a special focus in order not to miss usefulness. At the initial stage, they may be very tendency for the organization not to make it at all in that the level of profit maximization may be very low and it may lead to the close down of the firm in the future.
The company even find difficult to achieve its present objectives if it fails to run smooth production at a given period or, as started, as to be able to meet the demand of its terming customer.
A merchandising firm will run the risk of loosing customer with out adequate supplies to meet the request of customer
Decision to either make or buy constitutes the most significant part of the current production of most manufacturing/ merchandising firms, which indicate clearly that substantial amount of money is committed to this important tool. It is essential therefore to efficiently monitor the decision to either and over-investing.
- SIGNIFICANCE OF THE STUDY
Apart from the researchers, there are other parties to whom the research work is remarkably significant and could benefit from the client company i.e. Okin biscuits, Offa is also an advantage of gaining from the research work as it focused on its operations as the subject matter.
reference company could benefit in the area of purchasing and supply impact made by the researcher. Lastly, the professional colleagues will equally learn much bout make or buy decision as practically carried at in the manufacturing industry in which is an additional knowledge which has been learnt already in the lecture room.
1.4 AIMS AND OBJECTIVE OF THE STUDY
Purpose of this project is to contribute to the standard and buying performance of an organization. It also aimed at;
- To examine ways which manufacturing organization can achieve corporate goal in the area of profitability, lower operating cost, lower cost of finished project by applying make or buy decision in the strategic planning process.
- To make recommendation on area of improvement of the company’s make or buy decision
C . to control the standard and by buying system of performance of organization.
1.5 SCOPE OF THE STUDY
The scope of this research work is based and centered on core areas of make or buy decision i.e who determine what to make or buy and the effect of this decision on the organization profit.
In order to consider the scope of making or buying decision, there is the used to actually know that before purchase orders are raised, a decision is made on whether the item is question is to be manufactured or bought as the case may be.
The basic element involved in the performance of this purchasing function are, obtaining the proper equipment, material and service that are needed and where they are needed at the right price, time, quantity and quantity with minimum effort.
It covers all facts of purchasing in okin Biscuit ltd, Offa. For example, whether the decision has reduced the storage Space or has added to it, whether it aids quick distribution of products, whether quality of product rise or falls with make or buy decision at okin biscuit L.T.D, offa.
1.6 LIMITATION OF THE STUDY
There cannot be any successful research of this nature with out encountering some difficulties which might cause it success or failure. Difficulties in securing some of the vital document containing some valid information relating to the subject matter because of like-worm attitudes of some officers who are suppose to assist in the research work. This occurred with the view that such a research be of immense improvement in their performance.
The researcher also found out that it was not easy to combine the normal class lecture with the writing of this project work hence, time management invariably become a watchword for the researcher. Finally, the research often finds it highly impossible to travel to the firm’s location because of financial constraints
- DEFINITION OF TERMS USED
Make: it is the act of producing certain things.
Buy: is an idea of paid or getting by paying a price
Policies: the plan of action to be taking by management of an organization, policies define the boundaries within which decision can be made and directed towards the accomplishment of objectives.
Decision: it is the act of the making up of mind about certain things.
Capital equipment: is the Installation of equipment such as plant, machinery and other major equipment used directly for production of good and services.
Purchasing policy and procedure audits: this is used to determine if established purchasing policy and procedures are being added here to.
Purchasing: is the continuous management process that is responsible for anticipation, identification and the provision of the good and services that are required by an organization with objectives of increase organization profitability.
Production: it is the process of producing or making an item.
Capacity; Ability to certain, hold or get hold of something.
Unsatisfactory: Not giving pleasure or satisfaction from need or desire.
Specification: Is a definite description of what is wanted.
Supplier: one which responsibility is to supply or make available for further usage either for production or normal consumption.
Standard: it is a model with which something is compared.
Quality: is anything that conforms with one’s pre-determined standard.
Evaluation: evaluation in purchasing is required to ensure that progress is being made towards objectives according to plan. Is part of the control process?