Finance Principals from a Purchasing Viewpoint

Directors, Managers, Supervisors of Purchasing, Sourcing, Procurement, Supply Chain and other persons who have a vested interest in contract administration, compliance and enforcement.

As a result of this training, attendees will have a heightened professional level of evaluating supplier financial status and conducting cost analysis. The will learn how to use lessons taught in their day to day activities as a prerequisite to effective negotiating maximize lowest value added price. . Participants will do cost analysis using real life case studies that emphasize the key elements of analyzing proposals.

Certification for"Finance Principals from a Purchasing Viewpoint"

Day 1

a) Total Cost of Ownership (TCO)

Purpose: To familiarize the student with the various types of costs related to the purchasing function and to experience financial analysis with in-class simulations.

Topics:
? Definition of Cost Analysis
? Purchase Price: But One Component of Cost
? The Importance of Total Cost of Ownership in SCM
? Three Components of Total Cost
? TCO, Net Present Value Analysis (NPV), Estimated Costs
? Supply Management Action

b) Pricing

Purpose: To help the student better understand the law of supply and demand and the impact on pricing considerations.

Topics:
? General Economic Considerations
? Price Analysis
? Purchasing Design Work
? Documenting a Price Analysis
? Discounts


c) Cost Analysis

Purpose: To introduce and give an overall understanding of financial tools used to calculate and manage cost.

Topics:
? Cost Analysis
? Sources of Cost Data
? Direct Costs
? Learning Curves
? Application of Learning Curves
? Tooling Costs
? Indirect Costs
? Activity-Based Costing
? Target Costing
? Profit


Day 2

d) Cost Measurements

Purpose: To introduce and give an overall understanding of financial tools used to measure and report cost.

Topics:
? Standard Cost
? Purchase Price Variance (PPV)
? Cost Savings
? Cost Avoidance
? Cost Containment


e) Financial Measurement Formulas

Purpose: To present various ways to measure the financial status of a supplier.

Topics:
? Return on Assets Employed
? Return on Total Assets
? Net Operation Margins
? Current Ratio
? Quick or Acid Test Ratio
? Gross Margin
? Rate of Return of Sales
? Rate of Return Net Worth
? Earnings per Share
? Debt to Equity
? Debt to Net Full Assets
? Assets Turn Over
? Inventory Turn Over


f) Cost definitions

Purpose: To introduce and gain a better understanding of financial costs and how they
are used.

Topics:
? Total cost
? Standard costs
? Purchase price variance (PPV)
? Direct costs
? Indirect costs
? Fixed costs
? Variable costs
? Semi-variable costs
? Relevant vs. Irrelevant costs
? Life cycle costs
? Opportunity cost
? Activity based costing
.

Mr. Kelley has over 30 years of key leadership roles with multi-national companies. His
responsibilities covered Sourcing, Purchasing, Supply Chain, Operations, Materials,
Finance, Customer Service, Strategic Planning, Logistics, Quality Assurance and
Information Systems. International business experience spans nine countries in the Far
East, five countries in Europe, as well as Mexico and Canada.