QUESTION ONE

The rapidly declining strength of the kwacha currently has caused stress in many buyer supplier contracts.

Suppliers, who import most of the goods they supply, are continuously asking for review of prices stating that the deterioration in the value of the kwacha will cause them to incur losses if the prices are not adjusted. On the other hand, buyers$$ organisations are also feeling the effects of the deteriorating kwacha strength. Their budgets have become distorted and they are having to reduce the quantity of purchases where possible.

Your organisation has received a request for an upward price increase for strategic components used by the organisation. The order for the materials was signed in the first week of September, $2023$ based on quotations obtained in July, $2023.$ Delivery period in the contract was end December, $2024.$ The supplier has delivered fifty percent of the order, and have requested for an increase in the price stating that they need it to be able to complete the order because the weakened kwacha has caused them to spend higher on the delivery made so far.

Discuss how you would respond to this request, outlining the key considerations in arriving at a decision.

QUESTION TWO

$($a$)$ Identify an important item $($goods$,$ works or services$)$ purchased in your organisation. Identify the decision points in the process of purchasing the item and the key players at each point. Discuss the relationships between the key players identified and how they each contribute to the successful procurement of the item?