Demands into Supply

Identify your strengths and weaknesses - You may have excellent technical skills, but you may lack in business acumen. They are the most important parts of any business that involves food products. In direct costing, an income per unit not calculated; only an income on total sales of all products is determined by subtracting the total fixed cost from the contribution margin. This means that you have to only pay for the extra light fixtures and the cost of labor for their installation.

Functional specification can be described in the following ways or by a combination of them:

- By brand;
- By specification of physical and chemical characteristics, material and method of manufacture, and performance;
- By engineering drawings;
- Miscellaneous.

Purchase specification is a detailed description of the measurable characteristics desired in an item to be purchased, such as quality, size, weight, performance parameters, safety requirements, etc.

Successful purchasing organizations follow a purchasing cycle or process to ensure that the important elements are not overlooked. Each material or service being procured will require a different level of activity and priority. The experienced purchaser will ensure that each of the ten steps is fully performed and executed.

The purchasing cycle consists of the following steps: