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SOURCING Sourcing
is the process of vetting, selecting, and managing suppliers who can provide the inputs an organization needs for day-to-day running. Sourcing
is tasked with researching, creating and executing strategy, defining
quality and quantity metrics, and choosing suppliers that meet these criteria. Sourcing is concerned with creating sources through which the supplies an organization needs can flow through.
PROCUREMENT Procurement is obtaining or purchasing goods or services, typically for business purposes. Seven Stages of Procurement involve Stage 0: Needs Recognition Stage 1: Purchase Requisition Stage 2: Identify Suppliers and Float RFQ (Request for Quotations Stage 3: Solicitation Process (Includes Appraising Quotes and Negotiation) Stage 4: Evaluation and contract.
Step Name Japanese term Explanation 1. Sort Seiri (tidiness) Remove unnecessary
items from each area 2. Set In Order Seiton (orderliness) Organize and identify
storage for efficient use 3. Shine Seiso (cleanliness) Clean and inspect each area regularly
4. Standardize Seiketsu standardization) Incorporate S into standard operating procedures
5. Sustain Shitsuke (discipline)
Assign responsibility, track progress,
and continue the cycle 90
EOQ Model • Economic order quantity (EOQ) is a company's ideal order quantity to minimize inventory costs,
such as holding costs, shortage costs, and order costs.
• This production-scheduling model was developed in 1913 by Ford W. Harris and has been refined overtime The
formula assumes that demand, ordering, and holding costs remain constant.
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