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Focus on cost per unit – the bane of procurement professionals!
I have seen many procurement professionals focus on reducing unit cost of the purchased items. Vendors often entice with a marginal discount on large purchases, which help purchasers reduce their unit cost and score on this KPI.
Is it advisable? What are the risks associated with purchasing in large quantities in order to get the discount?
Let me give you a hint. The risks are associated with the underlying hidden assumptions, which sometimes backfire! What are these?
Would love to hear your thoughts…