LOG2030 Purchasing 2

Intermediate · 1 credit · TMT - Trades, Manufacturing and Transportation

Description: Students develop an understanding of the principles of locus of control, economies of scale, risk management, surface and hidden costs, tendering and procurement. Students also perform purchasing activities and address related factors, including budgets and inflation, within an organization’s decision-making structure.
Prerequisite: LOG1040: Purchasing 1
Parameters: Access to a purchasing, warehousing and distributing facility.

Outcomes The student will:

1 demonstrate functional knowledge of key principles of: • lines of authority
- 1.1 define the term locus of control
- 1.2 explain how the locus of control affects purchasing decisions
- 1.3 identify and describe the lines of authority for the purchasing section of the organization
- 1.4 operate efficiently and effectively within the identified lines of authority when assisting with purchasing activities • economies of scale
- 1.5 define the term economy of scale
- 1.6 explain how the use of the economy of scale principle adds value to a company
- 1.7 list examples of an economy of scale in one or more purchasing activities • risk management
- 1.8 define the term risk management including:
  - 1.8.1 expense items
  - 1.8.2 capital equipment
  - 1.8.3 production materials
- 1.9 identify and describe the risks associated with purchasing decisions; e.g., company liability, personal liability or Workers’ Compensation Board (WCB) coverage
- 1.10 identify and chart lines of authority, responsibility and accountability in the risk management process
- 1.11 identify and describe basic strategies used to manage and minimize risk when purchasing decisions are made • budgeting
- 1.12 explain the purpose or function of savings, capital and operational accounts
- 1.13 identify individuals responsible for:
  - 1.13.1 savings
  - 1.13.2 budget centre usage
  - 1.13.3 capital accounts
  - 1.13.4 operational accounts
- 1.14 demonstrate a basic understanding of cost accounting principles
- 1.15 explain the effect of inflation on the budget
- 1.16 explain the effect of the budget on inflation
- 1.17 identify and describe the process by which spending decisions are made
2 distinguish between surface and hidden costs
- 2.1 define and provide examples of:
  - 2.1.1 surface and hidden costs
  - 2.1.2 initial and lifetime costs
- 2.2 explain how total ownership costs and other costs affect purchasing decisions; e.g., insurance, gas, mileage, maintenance
3 demonstrate basic abilities relating to: • purchasing
- 3.1 explain the concept of best buy; e.g., size, quantity, quality, cost • decision making
- 3.2 explain the necessity to balance quality, cost and time in making purchasing decisions • tendering
- 3.3 define the term tendering
- 3.4 identify and describe the tendering process • procurement
- 3.5 define the term procurement
- 3.6 explain the purpose of specification writing in purchasing activities
4 demonstrate basic competencies
- 4.1 demonstrate fundamental skills to:
  - 4.1.1 communicate
  - 4.1.2 manage information
  - 4.1.3 use numbers
  - 4.1.4 think and solve problems
- 4.2 demonstrate personal management skills to:
  - 4.2.1 demonstrate positive attitudes and behaviours
  - 4.2.2 be responsible
  - 4.2.3 be adaptable
  - 4.2.4 learn continuously
  - 4.2.5 work safely
- 4.3 demonstrate teamwork skills to:
  - 4.3.1 work with others
  - 4.3.2 participate in projects and tasks
5 identify possible life roles related to the skills and content of this cluster
- 5.1 recognize and then analyze the opportunities and barriers in the immediate environment
- 5.2 identify potential resources to minimize barriers and maximize opportunities