Menu

Evaluation of a Procurement Plan for Use in a ProjectBased Organization Concept of Planning Purchases

0 Comment

During the process of planning for purchases, the project manager has to evaluate the different alternatives before making any purchases. He or she then has to decide which of them he will buy or abstain from buying (Kerzner 2009). The manager in charge of a project also has to decide the right quantities and their quality before making any purchases. Different types of projects require diverse types of requirements before the project implementation can begin. Legal requirements such as permits and licenses may also have to be acquired before a project commences. These requirements have costs associated with them, which a manager should include in the process of planning purchases. The decision concerning when a project manager should make a purchase is usually affected by the project’s schedule (Dinsmore and Cabanis-Brewin 2010). There are also other significant financial considerations that should be taken into account, which include the utilization of capital that could have been used for other purposes. The process of planning the purchases within a project environment also includes various risks that the manager should consider. This becomes an area that the planning process should provide details for the purpose of guiding the managers on the acquisitions that they intend to make in executing a project. The evaluation of the risks involved also encompasses carrying out reviews on the types of contracts that the project team will be involved in and the mitigation of the exposures involved in the risks (Stadtler and Kilger 2005). The project manager has to ensure that appropriate inputs into the process of planning purchases are incorporated during its implementation (Kendrick 2010). These include inputs such as organizational process advantages, business environmental factors, project scope statements and their breakdown structure for the duties to be performed (Stadtler and Kilger 2005).