should a purchase manager evaluate the cost of manu. of the product or the selling price of the product? why?

Question

should a purchasing manager evaluate the cost of manufacturing of the product or the selling price of the product? why?

Answer 1

I assume you are talking about the items that the purchasing manager buys. If its an important item, then its useful to know what different vendors sell it for. And if its possible, it would be very useful to know the cost of manufacturing an item. But manufacturing companies won't usually tell you that. The purchasing manager will usually seek several sources of supply on key items, and seek to have the various suppliers compete with each other, which will tend to lower the purchasing cost.

Answer 2

Unless the purchasing agent is going to manufacturer the product him/her self, there is no choice except to evaluate the selling price he/she must pay to purchase an amount of the product which is to be purchased.

Important factors for evaluation are; can the supplier deliver what is required? Will it be manufactured exactly to specification, and be delivered on time? These factors taken together create the value that the purchasing manager must evaluate and fully consider when making the purchasing decision.

Over time, with experience, the purchasing manager will develop trusted sources for each product catagory required.