Procurement methods have considerable impact on? A. Product pricing B. Inventory level C. Warehouse space D. Transportation modes
Question
Procurement methods have considerable impact on? A. Product pricing B. Inventory level C. Warehouse space D. Transportation modes
Solution
Procurement methods can have a significant impact on all of the options mentioned.
A. Product Pricing: The cost of procurement can directly affect the price of the product. If procurement costs are high, the product price may also be high to cover these costs.
B. Inventory Level: The procurement method can determine how much inventory a company keeps on hand. For example, a company that uses a just-in-time procurement method will have lower inventory levels than a company that uses a bulk procurement method.
C. Warehouse Space: The amount of warehouse space a company needs is directly related to its procurement method. A company that procures items in bulk will need more warehouse space than a company that uses a just-in-time procurement method.
D. Transportation Modes: The method of procurement can also affect the modes of transportation used. For example, a company that procures items from overseas may need to use air or sea freight, while a company that procures items locally may be able to use trucks or vans.
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