Question

Operational targets are often used to achieve operational objectives. Determine how the following operational targets may be used for achieving operational objectives in procurement. Indicate how they may be measured.

i) Cost & volume targets
ii) Quality target
iii) Efficiency and flexibility targets
iv) Environmental targets

Answer 1

Operational targets such as cost & volume, quality, efficiency and flexibility, and environmental targets are used in procurement to achieve operational objectives in a business. These targets can be measured using various metrics and indicators.

Step-by-step explanation:

Operational targets in procurement are used to achieve operational objectives in a business. Operational targets guide the actions and decisions made by the procurement team in order to meet objectives effectively. Here's how each target can be used and measured:

1. Cost & volume targets: These targets focus on reducing costs and increasing the volume of goods or services procured. They can be measured by tracking expenditure reduction and the number of items purchased.
2. Quality target: This target aims to ensure that procured goods or services meet or exceed quality standards. It can be measured through quality assurance metrics such as defect rates, customer feedback, or compliance with specifications.
3. Efficiency and flexibility targets: These targets aim to improve the efficiency and flexibility of procurement processes. They can be measured by examining cycle times, lead times, or the ability to respond and adapt to changes in demand or supply.
4. Environmental targets: These targets focus on environmentally sustainable procurement practices. They can be measured by tracking the reduction of carbon footprint, waste generation, or the use of renewable resources.