Purchasing volume

Actual costs incurred by Envirocare are considered proprietary information and are not disclosed. Costs for ancillary equipment, such as feed hoppers and transfer systems, total approximately 10,000. Virgin low-density polyethylene costs approximately 0.61/lb, or less depending on purchase volume. Recycled material costs about one-third as much, but supplies tend to be unreliable (D18512Q, pp. 167, 168). 

Purchase Volume Retail Price (dollars per pallet)... 

An example is Syngenta, then the world s nnmber 2 agrochemical company. While Syngenta s purchasing volume from Asian Pacific countries almost quadrupled in the... 

For an average chemical company or business unit with sales of EUR one billion, an EBITDA margin of ten percent, and a purchasing volume of EUR 500 million, reducing its overall spend by ten to 15 percent will result in an EBITDA margin improvement of five to seven and a half percentage points, if sustainable. 

A subscription to the installment scheme will guarantee both despatch of each volume immediately upon publication, and a lower price than by purchasing volumes on an individual basis. Yet the subscription may be terminated after completion of each installment. 

Pharmacies often choose one pharmaceutical wholesaler and esfablish a prime vendor relationship. The prime vendor relationship is an agreement that stipulates that the pharmacy will purchase a set amount of drugs from the wholesaler. In return for guaranteed purchases, wholesalers provide a discormf to fhe pharmacy. As parf of the agreement, wholesalers may provide further discounts based on purchase volume. Some pharmacies might also retain a secondary wholesaler to use as an alternative source of pharmaceuticals. However, purchases from fhe secondary wholesaler are usually kept to a minimum so as not to jeopardize quantity discounts from the primary wholesaler. 

Standardization of product purchases in the supply chain. Standardization of hospital supplies for their impact on (a) purchase volume, (b) ordering and tracking, (c) storage space, (d) resource allocation, and (e) economies of scale through group purchasing power (Vermond 2000). 

To make the segmentation sounder, the same procedure is repeated, but now the customers are not ranked according to their respective purchasing volume, but to the value of products sold. Again, it is likely that the diagram shows the distribution depicted in Fig. 3.6. 

The measurements classically used for an ABC analysis in this context are, for example, purchasing volume, the characteristics of the supplier with regard to technological, qualitative or financial matters, as well as the strategic importance of the supplier. However, Gelderman and van Weele (2005) criticize the fact that, due to the exclusive concentration on financial value, ABC analyses lack the treatment of costs associated with weak product performance. 

E.g. purchasing volume, demand growth, capacity utilization... 

Suppliers in this category are those who have already implemented sound sustainability practices and therefore pose a low sustainability risk to the buyer. However, the supplier s share of the firm s total purchases is low. Hence, the firm has a low priority for engaging this supplier in sustainability improvement. Because of the low purchase volume the firm would not be willing to pay a high price for sustainability of the supplier in this category. 

A key distinction between lot-size-based and volume discounts is that lot-size discounts are based on the quantity purchased per lot, not the rate of purchase. Volume discounts, in contrast, are based on the rate of purchase or volume purchased on average per specified time period (say, a month, quarter, or year). Lot-size-based discounts tend to raise the cycle inventory in the supply chain by encouraging retailers to increase the size of each lot. Volume-based discounts, in contrast, are compatible with small lots that reduce cycle inventory. Lot-size-based discounts make sense only when the manufacturer incurs high fixed cost per order. In all other instances, it is better to have volume-based discounts. 

---