The Pareto Analysis (aka the 80:20 rule) is a
logistical tool often used in inventory control. It runs
on the idea that 80% of a factor (eg: problems, stock
value) is caused by 20% of a factor. It is a helpful
analysis tool for focusing on the important factors at
post tender negotiation
A Post Tender Negotiation (PTN) is highly recommended
as part of the tendering process, where contracts are
going to be for more than a year.
price and cost
Price and Cost have different meanings, yet are often
Cost is the total of the individual costs that
make up an product or service (eg: labor, materials).
Price is what the product/service is sold for
in the market.
privity of contract
Privity of Contract refers to the general rule that
only parties to a contract can acquire rights and
liabilities under that contract. Therefore a third
party would generally not be able to enforce a contract
term, or sue for breach of contract, because they are
not "privy" to the contract.
A Pro-Forma Invoice is prepared by the supplier, prior
to shipment of goods, to inform the buyer of product
details, values, and quantities. It is similar, if not
exactly what the official invoice will look like, and is
mainly for the buyers information to assists in
Probity in Procurement is the confirmed
integrity, honesty and transparency across all
Procurement functions and processes.
Eg: In tendering, Probity includes treating
all bidders with fairness, and having an open and
Procurement is a strategic process of
procuring goods and/or services, to achieve the best
'Cost, Quality, and Time' results for the organization.
The Procurement function involves high levels of
negotiation, sourcing, and contract skills.
A Purchase Order refers to the contractual document
that is raised on the supplier (usually by the
Purchasing/Procurement Officer). It is sent
electronically or faxed, and specifies the
delivery address, and
terms and conditions of purchase.
It is best practice that a Purchase Order is raised
before any service is performed or goods delivered.