International Procurement and Cost Reduction in Manufacturing Firms Case Study of Mukw Ano Industries Limited

TABLE OF CONTENTS

TABLE OF CONTENTS .................................................................................................... ii

DECLARATION .... ......... .................................................................. ................................ iv

SUPERVISOR'S APPROVAL ............................ ............................................................. iv

DEDICATION ................................................................................................................... vi

ACKNOWLEDGEMENT ................................................................................................ vii

LIST OF ABBREVIATIONS .......................................................................................... viii

ABSTRACT ...................................... ................................................................................. ix

LIST OF TABLES ................................................................... ..................... ...................... X

CHAPTER ONE ............................................................................................................... 12

1.0 INTRODUCTION .................................................................................................. 12

1.1 Background of the study ......................................................................................... 12

1.2 Problem statement ................................................................................................... 13

1.3 Purpose of the study .............. .................................................................................. 14

1.4 Objectives of the study ............................................................................................ 14

1.5 Research questions .. ................................................................................................ 14

1.6 Scope ofthe study ................................................................................................... 15

1.6. 1 Geographical scope .............................................................................................. 15

1. 7 Significance of the study ......................................................................................... 15

CHAPTER TWO .............................................................................................................. 16

LITERATURE REVIEW ........................................... ................ ...................................... 16

INTRODUCTION ........................................................................................................ 16

2.1 The concept of international procurement ........... ................................................... 16

2.2 Forms of international procurement. ....................................................................... 17

2.2.1 Purchasing ............................................................ .......... ...... ................................ 17

2.2.2 Tenancy agreements ............................................................................................. 17

2.2.3 Franchising ........................................................................................................... 17

2.2.4 Hire purchase ....................................................................................................... 18

2.2.5 A lease contract. ................................................................................................... 18

2.2.6 Mortgage .............................................................................................................. 18

2.2.7 Counter trade ......................................................... .. ............................................. 18

2.3 tools used in international procurement.. ................................................................ 19

2.3. 1 Sourcing, .............................................................................................................. 19

2.3.2 Tendering .............................. ......... ..... .... ..... ............................. .. ... ...................... 19

2.3.3 Auctioning, ........................................................................................................... 19

2.3.4 Reserve auction, ................................................................................................... 20

2.3 .5 Ordering, .................................................. .............................. .......................... .... 20

2.3.6 Market place, ................................... ..................................................................... 20

2.4 Reasons for organizations engaging in international procurement. ........................ 20

2.5 Ways of reduction in business organizations .......................................................... 22

2.5.1 Suppliers relationship .............. .............................................. .... ........................... 22

2.5.2 Cost reduction and cost management .................................................................. 22

2.5.3 Target costing and value engineering . ............... ...... .......... .................................. 23

11

2.5.4 Capacity of utilization .......................................................................................... 23

2.6 relationships between international procurement and cost reduction ..................... 23

CHAPTER THREE .......................................................................................................... 25

Methodology ............................................................................. ........................................ 25

3.1 Research design ...................................................................................................... 25

3.2 Study population .......................................... ........................................... ................ 25

3.3 sampling procedure ................................................................................................. 25

3.3.1 Sampling design ................................................................................................... 25

3.3.2 A sampling size .................................................................................................... 25

3.4 source of data .......................................................................................................... 26

3.4. 1 Primary data ......................................................................................................... 26

3 .4.2 Secondary data ..................................................................................................... 26

3.5 Data collection methods .......................................................................................... 26

3.5.1 Oral interview ...................................................................................................... 26

3.5.2 Questionnaires ...................................................................................................... 26

3.6 Data processing methods ........................................................................................ 27

3.7 Data presentation ... ................................................................................................. 27

3.8 Limitations of the study .......................................................................................... 27