Purchasing transportation services is typically the largest

Purchasing transportation services is typically the largest cost component of any product. Discuss how a purchasing agent can reduce this cost while maintaining the desired level of service. It is important to consult outside sources (and list those that you use) beyond the course textbook.

Solution

Purchasing agents can play a significant role to reduce the cost involved with regards to purchase of transportation services while maintaining the desired level of service. Purchasing agents have a wide network of suppliers of transportation services and depending on the needs and requirements of their clients (i.e. the buyer of the transportation services) the purchasing agent can select a transportation service provider that is able to best meet the needs and requirements of the buyer while optimizing costs. This action of the purchasing agents leads to a reasonable purchase price for the buyers of the transportation services on one hand while ensuring that the operations are maintained and not hampered in any way on the other hand. The purchasing agents are able to coordinate effectively the needs of the buyer with that of the capability of the supplier of the transportation services. Purchasing agents also helps in bringing down costs through processes like negotiation, contract administration, and resolving any purchasing-related problems.

References:

1. Burt, David N., Donald W. Dobler, and Stephen L. Starling. World Class Supply Management: The Key to Supply Chain Management. Boston, MA: McGraw-Hill Irwin, 2003

2. Chang, Yoon, Harris Markatsoris, and Howard Richards. \"Design and Implementation of an e-Procurement System.\" Production Planning & Control 15, no. 7 (2004): 634–646.

3. Mehra, Satish, and R. Anthony Inman. \"Purchasing Management and Business Competitiveness in the Coming Decade.\" Production Planning and Control 15, no. 7 (2004): 710–718.