The following are price anaysis tools to be used for this question:

Competitive bidding - When competitive bidding is used, requests for bids are sent to three to eight potential suppliers depending. on the amount and complexity of the pur-chase. Requests for bids ask suppliers to quote the price at which they will perform according to the terms of the contract. Purchasing and supply management will gener-ally, but not always, award the contract to the lowest bidder if the lowest bidder is deemed qualified to perform the contract.

• Published price lists - printed catalogues and electronic catalogues. These are excellent sources of information on prices of standardised products such as chemicals, electric motors and other products forming part of a supplier's inventory. This information reaches the purchasing function through the post or from suppliers' representatives and should be properly filed, with suitable cross-references, so that prices may be compared easily. Using electronic catalogues provides a wider range of prices and potential suppliers, and often offers much additional information.
• Quotations - Quotations are sent to purchasers on request and usually refer to imported products or products manufactured according to the purchaser's specifications. Suppliers' representatives often assist in the analysis and interpretation of such quotations, thus serving as supplementary sources of informa-tion. In the case of low value standard items, telephone or internet quotations provide an excellent source of information that is immediately available.

• Commodity exchanges - Sensitive commodities such as copper, wheat and crude petroleum are often bought on world commodity markets and require the specialised skills of commodity buyers or commodity brokers. Usually prices are fixed in these markets and service, delivery times and other key variables are issues for negotiations. The wheat exchange of the Chicago Board of Trade, the London Cocoa Terminal Market and Safe in South Africa, for example, publish prices of commodities and raw materials traded on these exchanges daily. In most cases, these prices represent the current world prices for specific commodities.
• Price indices - Price indices for important commodities such as metals, wool and cot. ton are generally used in developed indus. trial countries such as the US and Britain as objectives for purchasing prices. They are essentially indicators of how the market prices of specific commodities change when compared with the price in a predetermined base period. Large manufacturing organisa. tions often develop internal indices based on the prices for the materials and components they purchase. By comparing market indices, it is easy to determine whether, in terms of its own price index, a particular organisation perfonned better or worse in a certain period.

• Furthermore, the trends in price fluctuations shown by market price indices over a period of time are very valuable for setting price determination objectives.

  The producer price index (PPI) tracks mate rial price movements from month to month.

  It monitors the increase in material commodity prices based on a sample of industrial purchasers Other price indices like the SEIFSA index for steel and related products are often published in the trade journals of specific industrial groups.

  Price indices are particularly valuable guides for the purchaser to use in setting price objectives.

  • Record keeping -Records of prices and other particulars of previous contracts in the purchasing and supply function are invaluable internal sources of information.
  • Electronic date interchange (EDI) sys-tems -Several organisations currently operating in South Africa offer an electronic tendering system, electronic catalogues or a computerised price-tracking system. Valuable information about prices and suppliers may be obtained through these systems.
  • Internet connections - Internet connections to websites of suppliers all over the world are currently one of the most important sources of information regarding the prices of a multitude of products and services. This kind of information has the additional value that purchasers can be sure that the prices that are ultimately paid for products or services are related to those paid by competitors in the global marketplace.

You are the purchasing manager for Meadow Feeds Incorporated and you are to: - Secure general items such as operational supplies (pens, notebooks and ink for the printers) for the administrative staff. - You are also required to secure bulk orders of wheat and grain for the bulk of Meadow Feeds International business of supplying farmers with cattle fodder. All while ensuring that the main aim is to keep the costs as low as possible. Explain which price analysis tool is most suitable for each of the situations above. Note: you are required to provide a paraphrased description of the selected tool and then justify why you as the procurement manager of Meadow Feeds Incorporated would use each of these tools by providing at least 2 justification points. Your descriptions are to be paraphrased