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It seems to me that this betrays a fundamental lack of understanding about the way the system works: it's not a system to procure pipettes, and procurement experts will tell you that aggregating procurement can lead to increased costs as well as to cost savings.
The proposed method does not minimize the procurement cost, but allows deriving robust decision with respect to price volatility.
TCPitotal procurement cost for product i.
Variable procurement cost, fixed ordering cost, and holding cost can be different in different periods.
At year five, the unit procurement cost was essentially the same: $201 million per unit.
The robustness of procurement strategies for high procurement costs is optimized and related procurement strategy is proposed.
Linked with this is sharing knowledge about procurement costs: "If you're going to save procurement costs, you need to be clever about how you share information".
The proposed method either deals with optimizing the opportunities to take advantage from low procurement costs or low pool prices.
Earlier this year, Renault-Nissan and Daimler forged a partnership to share platforms, engines, drivetrains and procurement costs.
Before he has even met the procurement team, Claiborne is assigned his first task of cutting procurement costs and messaging the news to the company.
"In many cases, procurement costs are surprisingly high and represent a very large opportunity for savings".
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com