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Question 9

Which of the following goals might be appropriate for the vice president of Purchasing?

Click the button next to the correct answer choice. After you have read the feedback, explore the other choices. Note: Your first selection will be used in tallying your score.

  • Reduce material costs by 15%

  • The best choice

    Correct choice. The purchasing department can make a significant contribution to reducing materials costs by controlling what the company pays for raw materials, and packaging.

  • Reduce overhead by 10%

  • Not the best choice. Overhead includes many variables—such as corporate office rents and salaries of corporate managers and administrative employees—that fall outside of the purchasing department's domain. Therefore, reducing overhead by 10% would not be an appropriate goal for the VP of Purchasing. The more appropriate goal would be "Reduce materials costs 15%." The purchasing department can make a significant contribution to reducing materials costs by controlling what the company pays for raw materials and packaging.

  • Increase sales revenue by 10%

  • Not the best choice. The purchasing department has little control over sales revenue, so increasing sales revenue by 10% would not be appropriate goal for this VP. The more appropriate goal would be "Reduce materials costs by 15%." The purchasing department can make a significant contribution to reducing materials costs by controlling what the company pays for raw materials and packaging.

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