The Integrated Model

1674 Words Sep 15th, 2015 7 Pages
Chapter 2: The Integrated Buying Model
Tennessee State University
MGMT 6220













The integrated buying model is used by the buyer in making buying decisions. Factors that affect decisions made in the integrated buying model are the cost per unit, quality level, and lead time. As each company tries to achieve their competitive advantage, the goals of a purchasing decision may vary. For example, most purchasing decisions require buying the right material at an acceptable cost and quality level within a reasonable lead time. The decision maker must consider multiples goals. As a result, the buyer is faced with several constraints. Budgetary constraints and quality level constraints can cause issues with
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A company who is financially influenced will be focused on achieving priorities based on meeting budget needs, but a company can be quality driven where they would like to achieve quality goals over cost objectives. Six Sigma is followed by many firms to become strategic partners. The philosophy is used to measure supplier quality which focuses on defects as a standard metric, provision of employee training, and the reduction of non-value added activities.
The lead time is important because it affects the flexibility and customer service. In order to achieve a competitive advantage, firms must adapt to external changes. If companies cannot adapt properly to external changes then their longer lead times can negatively impact their position in a volatile market. As a result, firms may pay the premium charge to acquire short lead times. Not only does the lead time affect customer service, but the uncertainty of lead times make it difficult to forecast production.
In the research paper, “An Integrated Model of the Behavioral Dimensions of Industrial Buyer- Seller Relationships” by Leonidas C. Leonidou, Dayananda Palihawadana, and Marios Theodosiou, the buyer-seller relationship is examined. The relationship between a buyer and seller is related to the purchasing decision. This is all tied to the cost, quality, and lead time of the integrated buying model. Decision makers can decide better products based on customer needs.…