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1. Reciprocal Relations: When a company deliberately buys as much as possible from its own customers it is said to practice reciprocity. In consumer goods industries reciprocity is not a problem as the sales are spread among many users. In producer goods industries however reciprocity is a fact of business life.
2. New Materials and Products: Engineering and manufacturing managers are always interested in new products and materials that will help them more efficiently and thereby achieve one of their primary objectives. The purchasing department can help because it deals regularly with the suppliers responsible for the new developments.
3. Economic Make or Buy : Make or buy decisions are generally made by committees consisting of departmental heads. The purchasing manager should spot the need for a make or buy decisions and refer it to the committee for actions.
4. Standardization: The fewer the items that need be controlled the simpler and more efficient does the materials management process become. Thus it is to the interest of the materials personnel to promote standardization and simplification of specifications.
5. Production Improvement: This is the most important primary objective of engineering department but the purchasing department can assist the engineering department. Their economic knowledge can supplement the technical skills of the engineers on programmes to boost profits through product change.
6. Inter Department Harmony: Materials management department deals with about almost all departments in the company. It can greatly contribute to the success of every other department and at the same time the success of materials management department depends on cooperation from the personnel of the other department.
7. Acquisitions: Business acquisitions and mergers are common. Acquisitions is taken as one of the ways of business expansion. It is no easy job to identify a possible candidate for acquisition and then to make the necessary overtures for eventual merger.
You have been asked to acquire charge of a system growth where the customer needs about fifty per cent of the functionality very immediately to meet a business opportunity but wher
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