Allama Iqbal Open University Islamabad (Department of Business Administration)

ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD
(Department of Business Administration)
PURCHASING AND PROCUREMENT PRINCIPLES (9542)
CHECKLIST
SEMESTER: AUTUMN 2020
This packet comprises the following material:
1. Course Outline
2. Assignment No. 1, 2
In this packet, if you find anything missing out of the above mentioned material, please
contact at the address given below:
Director Admission and Mailing

Services Block No. 28
Allama Iqbal Open University
Block No. 28, Sector H-8
Islamabad
Mahmood – ul – Hasan
(Course Coordinator)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE
ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF
DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN, WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.
ASSIGNMENT No. 1
Course: Purchasing and Procurement Principles (9542) Semester: Autumn 2020
Level: PGD Total Marks: 100
Credit Hours: 03 Pass Marks: 50
Note: All Questions Carry Equal Marks
Q. 1 Information systems (IS) impact supply chain management (SCM) on processes
such as planning, sourcing, and delivering and at levels ranging from tactical
operations to organizational strategy. Explain with arguments? (20)
Q. 2 Quality control (QC) is a procedure or set of procedures intended to ensure that a
manufactured product or performed service adheres to a defined set of quality
criteria or meets the requirements of the client or customer. “Explain? (20)
Q. 3 What is the Relationship between Supply and Logistics and also describe Financial
Significance of Supplier Spending? (20)
Q. 4 Distinguish between Commercial and Consumer Acquisition and also explain the
Qualifications of Purchasing and Supply Staff. (20)
Q. 5 During the 1990s and the first part of the 21 st century, the high availability and low
cost of transportation services relative to the cost of holding inventory encouraged
organizations to emphasize fast, frequent delivery to customers through such means
as just-in-time deliver. But things have changed dramatically in the last decade, and
companies increasingly are calling such long-standing strategies into question. The
“game changers” are volatile, escalating oil prices and an imbalance of supply and
demand for freight transport services. Explain. (20)
GUIDELINES FOR ASSIGNMENT # 1
The student should look upon the assignments as a test of knowledge, management skills,
and communication skills. When you write an assignment answer, you are indicating
your knowledge to the teacher:
 Your level of understanding of the subject;
 How clearly you think;
 How well you can reflect on your knowledge & experience;
 How well you can use your knowledge in solving problems, explaining situations,
and describing organizations and management;
 How professional you are, and how much care and attention you give to what you do.
2
To answer a question effectively, address the question directly, bring important related
issues into the discussion, refer to sources, and indicate how principles from the course
materials apply. The student must also be able to identify important problems and
implications arising from the answer.
For citing references, writing bibliographies, and formatting the assignment, APA
format should be followed.
ASSIGNMENT No. 2
Total Marks: 100
Pass Marks: 50
This assignment is a research-oriented activity. You are required to obtain information

from a business/commercial organization and prepare a report of about 1000 words on
the issue allotted to you to be submitted to your teacher for evaluation.
You are required to select one of the following issues according to the last digit of your
roll number. For example, if your roll number is P-3427180 then you will select issue # 0
(the last digit): -
Issues:
1. Management Information Systems (MIS)
2. e-procurement
3. Quality Function Deployment (QFD)
4. Material Requirements Planning (MRP)
5. Learning Curve
6. Governing Laws for E-Commerce and Intellectual Property
7. Challenges in Global Supply
8. Risk Management
9. Contemporary Issues in Purchasing and Supply Management
0. Nature and Role of Chief Purchasing Officer (CPO)
The report should follow the following format:

1. Title page
2. Acknowledgements
3. An abstract (one-page summary of the paper)
4. Table of contents
5. Introduction to the issue (brief history & significance of issue assigned)
6. Practical study of the organization (with respect to the issue)
7. Data collection methods
8. SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the
issue assigned
9. Conclusion (one-page brief covering important aspects of your report)
10. Recommendations (specific recommendations relevant to issue assigned)
11. References (as per APA format)
12. Annexes (if any)
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GUIDELINES FOR ASSIGNMENT # 2:
 1.5 line spacing
 Use headers and subheads throughout all sections
 Organization of ideas
 Writing skills (spelling, grammar, punctuation)
 Professionalism (readability and general appearance)
 Do more than repeat the text
 Express a point of view and defend it.

WORKSHOPS
The workshop presentations provide students opportunity to express their communication
skills, knowledge & understanding of concepts learned during practical study assigned in
assignment # 2.
You should use transparencies and any other material for effective presentation. The
transparencies are not the presentation, but only a tool; the presentation is the combination
of the transparencies and your speech. Workshop presentation transparencies should only
be in typed format.
The transparencies should follow the following format:

1) Title page
2) An abstract (one page summary of the paper)
3) Introduction to the issue (brief history & significance of issue assigned)
4) Practical study of the organization (with respect to the issue)
5) Data collection methods
6) SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the
issue assigned
7) Conclusion (one page brief covering important aspects of your report)
8) Recommendations (specific recommendations relevant to issue assigned)
GUIDELINES FOR WORKSHOP PRESENTATION:

 Make eye contact and react to the audience. Don't read from the transparencies or
from report, and don't look too much at the transparencies (occasional glances are
acceptable to help in recalling the topic to cover).
 A 15-minute presentation can be practiced several times in advance, so do that until
you are confident enough. Some people also use a mirror when rehearsing as a
substitute for an audience.
WEIGHTAGE OF THEORY & PRACTICAL ASPECTS IN ASSIGNMENT # 2 &

WORKSHOP PRESENTATIONS
Assignment # 2 & workshop presentations are evaluated on the basis of theory & its
applicability. The weightage of each aspect would be:
Theory: 60%
Applicability (practical study of the organization): 40%
4
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD
Course: Purchasing and Procurement Principles Course Code: 9542
Level: PGD Credit Hours: 03
UNIT-1 Purchasing and Supply Management

1.1 Introduction to Purchasing and Supply Management
1.2 The Relationship between Supply and Logistics
1.3 Financial Significance of Supplier Spending
1.4 Perspectives on Supply
1.5 Decision Tree for Selecting Supplier
1.6 Distinguishing Commercial and Consumer Acquisition
1.7 Qualifications of Purchasing and Supply Staff
1.8 Challenges for Purchasing and Supply Management
1.9 Supply Management for Procurement and Purchasing
1.10 Standard Organizational Structures to Manage Supply
1.11 The Nature and Role of Chief Purchasing Officer (CPO)
1.12 Various Supply Activities and Responsibilities
1.13 Overview of Supply Teams
1.14 Types of Supply Teams
UNIT-2 Supply Process and Information Systems

2.1 Introduction to Supply Cycle
2.2 Aligning Strategy and Goal to Optimize Supply Process
2.3 Ensuring Process Compliance
2.4 Steps of Supply Management Process
2.5 Supply Process flowchart
2.6 Rush vs Small Value Orders
2.7 Policy Manuals
2.8 Role of Information Technology
2.9 Introduction to e-procurement
2.10 Understanding Management Information Systems (MIS)
2.11 Uses of Technology for Supply management
2.12 Technology Tools for Supply Operations
2.13 Electronic communication and Online Auctions
2.14 Reverse Auctions
2.15 When to Use Reverse Auctions
2.16 Conducting Reverse Auction Events
2.17 Important Factors for e-commerce
UNIT-3 Quality, Quantity and Inventory Management

3.1 Need Determination
3.2 The Transformation and Value-Added Chain
3.3 Methods of Description
5
3.4 Differentiating Standardization and Simplification
3.5 Quality, Suitability, and Best Buy
3.6 Various quality standards and Awards
3.7 Understanding Total Quality Management (TQM)
3.8 The Concept of Quality Function Deployment (QFD)
3.9 Importance of Inspection and Testing
3.10 Essentials of Process Control
3.11 Supplier Certification
3.12 Introduction to Inventory Management
3.13 Functions and Types of Inventories
3.14 The Concept of ABC Classification
3.15 Calculating Inventories Cost
3.16 Important Forecasting Techniques
3.17 Estimating Order Quantities and Inventory Levels
3.18 Material Requirements Planning (MRP)
3.19 Significance of Lean Supply
3.20 Kanban Implications for Supply Management
3.21 JIT Implications for Supply Management
UNIT-4 Logistics Decisions for Transportation and Pricing

4.1 Managing Logistics Decisions
4.2 Free on Board and Incoterms
4.3 Transportation Regulation and Supply’s’ Involvement
4.4 Types of Transportation Carriers
4.5 Rates and Pricing
4.6 Other Service Providers
4.7 Important Documentation in Freight Shipments
4.8 Tracing Shipments
4.9 Transportation and Logistics Strategy Formulation
4.10 Understanding Cost to Price Relationship
4.11 External Influences on Pricing
4.12 Various Types of Purchases
4.13 Quotations and Competitive Bidding
4.14 Price Fluctuations and Changes
4.15 Causes of Contract Cancellation
4.16 Forward Buying and commodities
UNIT-5 Negotiation Process and Supplier Selection

5.1 Introduction to Cost Management
5.2 Total Cost of Ownership
5.3 Target Pricing and Activity Based Costing
5.4 The Learning Curve
5.5 Types of Discounts
5.6 Negotiation for Price Determination
5.7 Effective Negotiation Strategy and Practice
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5.8 Model of Negotiation Process
5.9 Factors Affecting Supplier Selection Decision
5.10 Decision Trees for Supplier Selection
5.11 Potential Sources for Supplier Selection
5.12 The Evaluation of Potential Sources
5.13 Important Methods for Supplier Evaluation
5.14 Establishing a link for Sourcing to Strategy
UNIT-6 Investment Recovery, Law and Ethical Issues

6.1 Introduction to Environmental Investment Recovery Initiatives
6.2 ISO 14000 Environmental Standards
6.3 Benefits of Effective Disposal
6.4 Various Disposal Materials
6.5 Key Concerns for Material Disposal
6.6 Understanding Profitable Disposal
6.7 Understanding Disposal Channels and Disposal Partner
6.8 Effective Disposal Procedures for profitable Disposal
6.9 Legal Authority vs Personal Liability
6.10 Authority of Suppliers Representatives
6.11 The Uniform Commercial code
6.12 Common Law
6.13 Governing Laws for E-Commerce and Intellectual Property
6.14 The Concept of Product Liability and Alternative Dispute Resolution
6.15 The Sarbanes Oxley Act
6.16 Ethics and Social Responsibility
6.17 Research for Supply Decisions
6.18 Components of Effective Buying
6.19 Research Opportunities in Supply Domain
6.20 Supply Planning Process and Supply Budgets
6.21 Efficiency Metrics vs Effectiveness Metrics
UNIT-7 Global Supply and Public Supply Management

7.1 Nature and Importance of Global Supply
7.2 Challenges in Global Supply
7.3 Indentifying and Evaluating International Suppliers
7.4 The Role of Global Sourcing Organizations
7.5 Incoterms, Intermediaries and Countertrade
7.6 Foreign Trade Zones
7.7 Free Trade Agreements
7.8 Key Characteristics of Public Supply
7.9 Acquisition Procedures for Public Buying
7.10 Military Supply and Various Contracts
7.11 State, Local, and Municipal Supply
7.12 Model Procurement Code
7.13 Public Supply Changes
7
UNIT-8 Capital Goods and Services
8.1 Procuring Capital Assets
8.2 New Technology for Competitive Advantage
8.3 Sourcing and Supply issues
8.4 Merits and De-merits of Buying Used Equipment
8.5 Leasing Equipment
8.6 Technology Acquisition vs Construction Acquisition
8.7 Significance of Services
8.8 Significance of Services Spend
8.9 Analyzing Services
8.10 The Process of Acquiring Services
8.11 Managing Third Party Service Providers
8.12 Expanding Supply’s Involvement
8.13 Process Steps
UNIT-9 Purchasing Strategy and Supplier Relations

9.1 Understanding Merits and De-Merits of Make or Buy
9.2 Nature, Scope and Significance of In-sourcing
9.3 Nature, Scope and Significance of Outsourcing
9.4 Linking Supplier Performance and Customer Satisfaction
9.5 Purchaser to Supplier Relations
9.6 Purchase Supplier Satisfaction Matrix
9.7 Rating Supplier Performance
9.8 Partnerships and Strategic Alliances
9.9 Supplier Development Initiatives with Purchaser
9.10 Strategy in Purchasing and Supply Management
9.11 Strategic Planning Levels
9.12 Challenges for Supply Objectives and Strategies
9.13 Strategic Planning within Purchasing and Supply Management Context
9.14 Categorizing Supply Strategies
9.15 Strategic Purchasing Planning Process
9.16 Risk Management
9.17 Strategic Components
9.18 Contemporary Issues in Purchasing and Supply Management
Recommended Books:
 Leenders, M.R., Johnson, P.F., Flynn, A. E., and Fearon, H.E. (2010) Purchasing and
Supply Management (13thed.), McGraw-Hill, The McGraw-Hill Companies, Inc.,
New York.
 Baily, P., Farmer, D., Crocker, B., Jessop, D., and Jones, D. (2008), Procurement,
Principles & Management (10th Edition), FT Prentice Hall.
 Monczka, R., Handfield, R., Giunipero, L., (2011), Purchasing and Supply Chain
Management, Cengage Learning.
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ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD

(Department of Business Administration)

PURCHASING AND PROCUREMENT PRINCIPLES (9542)

SEMESTER: AUTUMN 2020

This packet comprises the following material:

Director Admission and Mailing

This assignment is a research-oriented activity. You are required to obtain information

The report should follow the following format:

The transparencies should follow the following format:

GUIDELINES FOR WORKSHOP PRESENTATION:

WEIGHTAGE OF THEORY & PRACTICAL ASPECTS IN ASSIGNMENT # 2 &

UNIT-1 Purchasing and Supply Management

UNIT-2 Supply Process and Information Systems

UNIT-3 Quality, Quantity and Inventory Management

UNIT-4 Logistics Decisions for Transportation and Pricing

UNIT-5 Negotiation Process and Supplier Selection

UNIT-6 Investment Recovery, Law and Ethical Issues

UNIT-7 Global Supply and Public Supply Management

UNIT-9 Purchasing Strategy and Supplier Relations

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