See the answer in explanation. Explanation: When a fixed asset reaches the end of its life, it requires decommissioning before reconditioning or disposal. Decommissioning is to observe all the safety measures and technical procedures and stop active machinery or an asset from operation (example; gas plant, power generator, transformer etc. Decommissioning process include the following aspect 1) Preparation: Plan the process 2) Dismantle: Take the asset apart and remove hazardous waste 3) Processing: make safe any hazardous waste 4) Disposal: Ensure paper work is received to confirm removal and disposal
Question 62
Describe the seven stages of the Tender Process and explain the reasons why the stages must be followed.
Correct Answer:
The purpose of the tendering process is to invite potential suppliers to bid to supply a product or service to the buying organization. Then buying organization select suitable suppliers, award con-tract and manage. The process is selected mostly when the need is a large or complex project or the law mandates it or it is in the company's policies to do so. The stages of the tendering process includes; Stage 1: decide which style of tender to use. There are four types of tendering used within pro-curement and this include; 1) open 2) Restricted 3) Negotiated 4) Competitive Dialogue Stage 2: Prepare invitation to tender (ITT): this stage is to prepare the document that will be made available to potential supplier. It should contain everything potential bidders will need to know to fully understand the need and to prepare and send a suitable RESPONSE it may likely in-clude; open letter, company details, overview of a project, evaluation criteria, submission date and so on. Stage 3: send ITT: With fairness, transparency and equality, buyer will provide the documents to all potential suppliers at the same time and also provide exactly the same information/documents to all suppliers. If after receiving the ITT and some suppliers seek clarifications on anything in the documentation, buyers must give same response to identical questions to keep the process transparent and fair. Also, the response to each query to all bidders in the process. Failure to this may result in bidders who feel disadvantaged or discriminated in any form to submit a legal challenge. Supplier submitting a Legal challenge may cause delay in the process and eventually increase administrative cost for the buyer. Stage 4: Buying organization receives responses to the Invitation to tender from suppliers (bids). Suppliers must adhere to the bid submission dead line included in the invitation to tender document. Any bid that arrives after the deadline must be left out of the process, or else this may result to other suppliers legally challenging the process. Stage 5: Evaluate bid. The buying organization can now evaluate the bids based on the criteria in the ITT document. It is always thorough that cross-functional team evaluates the bids to guarantee complete fairness and ensure that the chosen bid is fit for purpose. In evaluating the bids, the cross-functional team will consider the bids in the following areas; supplier organization, ethics, price, sustainability, quality, payment, disposal, service level, location, warranty and risk. Stage 6: Award contract and give feedback hence the buying organization wards the contract to the winning supplier. This can take place by a formal communication like a letter or an e-mail. Stage 7: Contract management. Contracts must be evaluated against the criteria in the invitation to tender. The reasons why these stages must be followed includes; 1. Knowing the right TYPE of tender to use, reduces administration cost, for example, deciding to do restricted tendering to reduce the interest that are going to be sent in have already cut down on administrative cost. 2. The supplier can know what exactly the buyer's intentions are by developing description and the required specification. 3. To ensure that objectives of resorting to use the tendering style and the tendering process is achieved 4. To ensure that the organization generates added value by going through the stages. 5. To ensure that there are none unethical issues like fraud, bribes etc are not part of the system. 6. To ensure that the tendering process becomes transparent to all suppliers. These stages must be followed for transparency and fairness. Just like in stage 3: buyer send out the ITT to potential suppliers at the same time and providing them same information. Failure to this and bidders who feel disadvantaged or discriminated in any form may submit a legal challenge. Supplier submitting a Legal challenge may cause delay in the process and eventually increase administrative cost for the buyer. * Refer to the question column for response
Question 63
What information should be included on a purchase requisition?
Correct Answer:
See the answer in explanation. Explanation: RESPONSE A purchase requisition should contain the following information 1) Date of the requisition 2) Description of what is required 3) Supplier if known 4) The quantity 5) when the need is required 6) why the need is required 7) who identified the need 8) who approved the need 9) if it's a re-buy
Question 64
Write all of factors that contribute towards value for a product that you regularly purchase.
Correct Answer:
See the answer in explanation. Explanation: Factors that contribute towards value for clothe gum in a fashion firm; 1) How much money does the gum cost? 2) How much is the benefits of using the clothe gum? 3) Does customers prefer clothe gum at the bottom of their garment? 4) Is the clothe gum difficult to use? 5) Does the clothe gum beautifies the fabric when placed properly? 6) Does it give a better finishing? 7) Is it ethical to use? 8) Is it from a sustainable source? 9) is it environmental friendly? 10) Does using clothe gum suggest innovation in fashion? Refer to the question column for response
Question 65
What is commissioning?
Correct Answer:
Commissioning is bringing something new into working condition, e.g start running a gas plant after building it. Commissioning is one of the eight elements that form the cycle of whole life asset management. The commissioning of an asset has the following associated costs, installation, training insurance, testing, operational efficiencies/performance and quality.