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Principles Of Purchasing(Pscm 024)  Question Paper

Principles Of Purchasing(Pscm 024)  

Course:Accounting, Finance& Investments

Institution: Kenya Methodist University question papers

Exam Year:2012



TIME: 2 HOURS
Instructions: Answer Question ONE and any other TWO Questions.
Question One
What do you mean by organization of purchasing. Distinguish between centralized and decentralized purchasing.
(10 Marks)

Discuss the six R’s of purchasing.
(12 Marks)

What do you understand by standardization? Explain aims of standardization.
(8 Marks)

Question Two
Define price forecasting, explaining various price forecasting techniques.
(8 Marks)
State some guidelines for effective negotiations.
(12 Marks)

Question Three
Discuss the main considerations in make or buy decisions.
(20 Marks)

Question Four
Distinguish between materials control and inventory control.
(4 Marks)
Explain the following control levels:
(8 Marks)
Maximum level
Minimum level
Average stock level
Safety stock level.
Discuss the techniques of inventory control.
(8 Marks)

Question Five
The cost of raw materials consumed during June 1996 is shs. 100,000 and the average inventory held during the month is shs. 20,000. Calculate the inventory turnover ratio.
(5 Marks)
Discuss the importance of a purchase budget.
(5 Marks)
Discuss the merits and demerits of outsourcing.
(10 Marks)






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