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Chapter 1 The Purchase Specification

Chapter 1 The Purchase Specification. An Overall View. Purchase Specification. Product specification -- description of characteristics in a product to fill needs. Includes only information of product. Purchase specification -- also includes services required from suppliers. Why Have Specs?.

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Chapter 1 The Purchase Specification

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  1. Chapter 1The Purchase Specification An Overall View

  2. Purchase Specification • Product specification -- description of characteristics in a product to fill needs. Includes only information of product. • Purchase specification -- also includes services required from suppliers.

  3. Why Have Specs? • Create quality and cost control standards • Help avoid misunderstandings • Can be used as a training device • Assist in the bid process

  4. Who Decides What to Include on a Spec? • Owner or manager • Buyer • User • Some combination of the three

  5. Performance requirement Exact name Packer’s name Grade Size Trim Package size Type of package Preservation or processing Point of origin Packaging procedure Ripeness Form Color What Is Included on a Spec?

  6. Trade association standards Approved substitutes Expiration date Chemical standards Inspection procedure Cost and quantity limitations General instructions Specific instructions to bidders What Is Included on a Spec? Cont.

  7. What Influences the Spec? • Goals and policies • Time and money available • Production systems • Storage facilities • Skill levels of employees • Menu and prices • Service style

  8. Who Writes the Spec? • Company personnel • Industry publications • Hire an expert • Buyer and supplier can work together

  9. Potential Problems with Specs • Unreasonable requirements • Inadvertent discrimination • Too high of quality standards • Broad grades • Static information • Employees expertise in understanding information

  10. Problems Associated With bid Buying • Lowball • Inequality among bidders • Tight specifications • Redundant favoritism • Delivery schedules

  11. Measures of Quality • Federal government grades • Packers’ brands

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