Questions answer - Case Study Example

Why does the contemporary view of procurement as a strategic activity differ from the more traditional view of purchasing?Purchasing is buying of goods and services to be useful to an organization. In the past, organization bought goods of good quality and quantity to offer excellent services to the clients but recently the trend has changed as purchasing is seen as a strategic form used by companies to control bottom line cost as they purchase goods at a lower price. Purchasers also seek to improve purchasing processing to attract clients as there is a high competition.

Traditional purchasing process involved several steps such as orders, invoices and the like. These methods have become extinct over the years as they are slow, expensive and labor extensive. In the past, the process of purchasing was clerical as the buyer was focused on buying quality goods from the supplier with the lowest price possible (Reddick 148). The buying of quality goods attitude has changed over the years as there has been increased competition locally and internationally over goods and services, hence suppliers do consider both quality and the prices of goods.3. How does lowest TCO differ from lowest purchase price?

Total Cost Ownership also referred to as TCO, is the purchase of an asset plus the cost of the operation (Reddick 150). When buying an item the buyer should not look at the item purchase price but also the cost of ownership. That is, and the item with a lower total cost will have a better value in the end. Lowest purchase price on the other hand, refers to the lowest amount of cash that a seller offers to the purchaser regarding the sale of a particular item. Work CitedReddick Christopher. Public Administration and Information Technology.

Jones & Bartlett Publishers. Boston, MA.2011 . Print