Product-Based Approach

TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
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The Product-Based Approach Utilizing product-based purchasing means that products are sold according to their capabilities. This approach results in a hierarchy or vertical ordering of merchandise. Product-based purchasing enables the determination of optimal inventory levels, quantity, and cost for each product category. However, an implicit ranking is possible only when all purchasers consider the same or similar products as preferred.

The Transcendent Approach Also known as the holistic approach, this involves the use of multiple approaches to ensure product quality. The transcendent approach is an optimization strategy that determines optimum quantities and combination of products that meet predetermined requirements. This is opposite to the product-based approach in which a single criterion is utilized in determining inventory levels and quantities.

The process-based and writing approaches analyze material at the actual time of purchase. They are also known as the production based and the item-level approaches respectively. While the product-based approach concentrates on warehouse analysis and data collection, the process based methodology considers estimated reading time, preparation of raw data, production of related documents, and the integration of these into a finished product. Many companies use both process and writing methods in their product quality audits.

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