The Integrated Model

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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 …show more content…

The decision maker is the link to the buyer-seller relationship. As mentioned before the decision maker who is making the buying decisions that is affecting the customers must satisfy cost, quality, and lead time goals within the constraints. Customers can “ensure a long term supply of inputs in their production processes, make use of the seller’s expertise and resources to the seller’s production operations that would speed up processes, reduce wastage, improve efficiency, exploit technical developments, and cost rationalization in the seller’s organization” (Leonidou, Palihawadana, Theodosiou 2006). Cost, quality, and lead time are important factors in the integrated buying model. These attributes can also be applied to the integrated inventory model. The article, “An Integrated Inventory Model with Controllable Lead time and Setup Cost Reduction for Defective and Non-Defective Items” presents an integrated inventory model with controllable lead time with setup cost reduction for defective and non-defective items under investment for quality improvement. The study is associated with the lead time and setup reduction as the opportunity cost and lead time are key factors in the inventory decisions. Overall, the objective is to minimize the total cost. The article analyzes the optimal order quantity, lead time, process quality, and

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