What is the concept of “adding value” to a business in terms of purchasing for the above company?

The purchasing situation

An understanding of the buying situation is vital for both the purchasing (procuring) company and the supplier (selling company).

· Companies are simultaneously purchasing and selling

· Sales and purchasing activities are the links connecting businesses along the value chain

· The value received by the end user depends on the quality of all players (companies). It is, therefore, highly important to develop these relationships correctly and with the right players

Questions (each carries an equal weight)

1. Using the company above, explain why  effective purchasing is important for their business?
2. What is the concept of “adding value” to  a business in terms of purchasing for the above company?
3. What are “make-decisions” and “buy decisions” and how would decisions about these points be made for this      company?
4. What are the major benefits of sustainable purchasing/sourcing for the company?
5. Explain how modern technologies are helping purchasing processes and purchasing decisions in the above      example?