A Study of Decision-Making Process for Truck Purchase

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A DMU for a truck purchase dealer includes the decision-makers, the coordinators, initiators, influencers, buyers, and users. The initiators propose the need to purchase a truck after which the influencers will attempt to assess the need along with their opinions. Decision-makers make the final decisions in relation to buying the proposed truck who will then hand over the responsibility to buy to the buyers. The users constitute the individuals who will use the purchased truck. Such a DMU is effective due to its coverage of a very wide spectrum from the initiation of the need to buy the truck to the final individuals who will use it. Important to note is that the size of this DMU does not rely on company size as it constitutes the fundamental truck purchase process. However, it is affected by other factors such as time availability and the assets involved in the process of decision-making.

Table A: Evaluative Criteria and Organizational Role

Functional role in organization

Evaluative criteria used in Purchase decision

1. Production – suppliers of trucks have to be confirmed with corporate blanket purchase order as it shows negotiations grounded on appraised usage for the period of commitment but then it is not an authorization to ship or build. Actual quantities of orders are recorded alongside a plant release (paccar.com).

2. Travel/MRO/IT- are tasked with the responsibility of negotiations and management of individual contracts along with other agreements.

3. Aftermarket- this means that it is their responsibility to negotiate costs and manage Paccar parts in different nations.

4. Tooling- the suppliers are required to maintain the machinery in good working conditions so as to produce quality parts.

5. Terms and Conditions- the suppliers of the company are required to abide by the terms and conditions stipulated in the purchase orders unless the company states otherwise

Differences between Companies Owning Their Own Trucks and Those That Lease

Companies that lease obtain assets with minimum initial expenditure and as a result, they seldom need down payments and their cash flow remains intact whereas the companies that buy require maximum initial expenditure to acquire the truck. Furthermore, lease payments are deductible as business expenses on tax returns which reduces the lease costs on the company, a luxury that buying companies cannot enjoy. In the process of leasing, the company avoids buying equipment that may be obsolete, a risk that buying companies have to face.

Works Cited

 PACCAR." Paccar.com. N.p., 2018. Web. 26 Nov. 2018.

January 19, 2024

Business Economics

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