Question

3. Many non-procurement executives are skeptical about the variety of the savings being touted by the procurement organization. What are several ways procurement organizations calculate cost reduction? What are several types of cost avoidance service providers employ?

Answer 1

here I am going to describe about many non procurement executives are sceptical about the variety of savings being touted by the procurement organisation along with what are the several ways procurement organisation calculate the cost reduction and what are several types of course forwarding services providers employ.

First of all am going to describe about what is cost avoidance in the procurement. cost of evidence is a set of rules or set of instructions on the set of activities which are taken out by the professionals to avoid the further costs. according to many researches direct cost savings are much more tangible than that of the cost avoidance in the procurement. the real meaning of cost avoidance in procurement can be described by an example such as if someone locks the the negotiation that there will be no fried or fried service with the supplier to avoid the further cost that would be the best example of the cost avoidance.

Procurement savings of the cost reduction are the same things and there can be several ways document organisation calculate the cost reduction such as :-

1) review suppliers terms and discounts.

2) consolidate suppliers and deliveries.

3) consolidate purchasing request and intervals.

4) review purchasing requirements.

By above following ways the procurement organisation can calculate the cost reduction in the procurement.

They can be several types of cost avoidance services providers employee such as :-

as earlier described cost avoidance services are the set of rules on the set of activities which are taken out by professional to reduce the further cost in the procurement there can be many ways to do that such as fixing the negotiation with the suppliers for free fright etc.