4 Register Number :

PART - B Name of the Candidate :

6. (a) Explain the factors that influence the make 6 1 1 1

or buy decision, with an example. (10)
P.G. DIPLOMA EXAMINATION, 2008
(b) An item which is required by the company
( MATERIALS MANAGEMENT )
can be manufactured on any of the three
following machines and also it can be ( PAPER - I )
purchased at a price of Rs 1·20 per
component. 150. PURCHASING MANAGEMENT

December ] [ Time : 3 Hours

Machine Fixed cost Variable cost
(Rs.) (Rs. / unit)
Maximum : 100 Marks
M1 9,000 0·75
M2 3,500 0·50 Answer any FIVE questions,
choosing THREE from Part – A
M3 92,000 0·05
and TWO from Part – B

Suggest the best option if the requirement PART - A

is 2,000 units and give the decision rules.
(10)
7. (a) What is PERT ? Explain the different
steps involved in the technique of PERT
planning ? Also, state the importance of
critical path. (10)
1. (a) Explain the role of purchasing function as
a subsystem of the integrated materials
management with an illustration from an
automobile industry. (10)

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(b) With a line sketch, describe the (b) Explain the following terms : (10)
organisation structure of a purchasing
(i) Learning curve.
department of a medium scale industry.
Also, discuss the functions of different staff. (ii) Speculative buying.
(10) 5. (a) Explain the following types of discounts
2. (a) What is right quality ? Discuss the different while making industrial purchase
activities : (10)
methods of prescribing the right quality.
(10) (i) Cash discounts.

(b) What is the need for evaluation of the
right source ? With an industrial example,
explain weight point method. (10)
(b) ABC company plans to sell an article at the
3. (a) Discuss the different methods of tendering
process. Also, compare and contrast them.
(10)
(b) Explain the principles of better purchasing
management. Also, explain the terms
‘visible and invisible costs’ associated in
purchase activities. (10)
(ii) Trade discounts.
(iii) Quantity discounts.
local market. The articles are purchased
at Rs. 5 on the condition that all unsold
articles shall be returned. The rent for
the space is Rs. 2,000. The articles will
be sold at Rs. 9. Determine the number
of articles which must be sold
(i) To break - even.

4. (a) What is ‘value analysis’ ? - Explain the (ii) To earn Rs. 400 as profit.
different steps involved in Value Analysis. (iii) If the company sells 750
(10) articles, calculate margin of
safety and profit. (10)

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8. Explain the following aspects by q uoting (b) The purchase activity details along with
industrial applications : (10 + 10) time estimates and precedence
relationships are given below : (10)
(i) Import of machinery.

(ii) The DGS & D. Activity Predecessor Time estimate

a m b
9 . Discuss the following with respect to practical
A - 1 2 3
aspects :
B A 1 2 3
(i) Foreign exchange regulation in C A 2 4 6
international purchasing. D A 2 5 14
(ii) Value analysis Vs cost reduction. E C, D 6 12 18
F D 1 3 5
(iii) N egotiations in purchasing.
G E 10 12 30
10. Write short notes on the following : H G 3 5 7
(i) Buyer-S eller relationship and ethics. I H 1 2 3
J B and I 5 10 15
(ii) M ethods of performance appraisal of
vendors.
(i) Construct the network.
(iii) Importance of insurance in purchase
management. (ii) Calculate the expected time and
variance for each activity.

(iii) Critical path and project duration.

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