KIMUTAIJEPMWETICHMETRIN
INDEX:5621010016
RESEARCHPROJECTSUBMITTEDTOKENYANATIONALEXAMINATIONSCOUNCILINPARTIALFULFILMENTOFTHEREQUIREMENTFORTHEAWARDOFCERTIFICATEINSUPPLYCHAINMANAGEMENTOFEMININGTECHNICALTRAININGINSTITUTE.
DECLARATION
DECLARATIONBYTHESTUDENT
Iherebydeclarethattheworkpresentedinthisresearchproposalhasneverbeenpresentedbefore,tothisexaminationbodyorotherinstitutionforanacademicaward,allworkisoriginal.
Name:KimutaiJepmwetichMetrin
DeclarationbytheSupervisor
Name.Mrs.Rono. Sign…………………………Date…….……………
DEDICATION
Idedicatethisprojectfirst,tothealmightyfatherwhogavemebothphysicalandmentalstrength,toaccomplishthisstudy.Secondly,Idedicateittomysupervisor;Mrs.Ronoforthetirelesseffortandcommitmenttowardsmakingthisprojectproposalsuccessful.Lastly,Idevoteittomyfamilyandfriendsforthesupporttheyaccordedmeduringthistimeofresearch.
ACKNOWLEDGEMENT.
IwouldliketothankthealmightyGodforthegiftoflifeandguidancethroughoutmyeducation,ithasbeentoughbutHehasmadeitpossible.
MyheartfeltgratitudegoestomysupervisorMiss.Ronoforthetirelesseffortsandexpertiseherenderedtousduringhersupervision.
Specialthanksgotomyparents,siblings,friends,andclassmates,fortheirlove,moralandfinancialsupportduringtheentireperiodofourprojectproposal.
Iamindebttoallthosethathelpmeinanyway,andtherespondentswhowillinglygavemetheInformationIneeded.
GodBlessyou.
ABBREVIATIONS
AHP:AnalyticHierarchyProcess
BLI:BetterLifeIndex
CPAR:CountryProcurementAssessmentReport
ERH:EldamaRavineSub-countyHospital
ISO:InternationalOrganizationforStandardization
MOH:MinistryofHealth
OECD:OrganizationforEconomicDevelopment
PPDA:PublicProcurementandDisposalAct
WHO:WorldHealthOrganization
DEFINITIONOFTERMS
Procurement-Itistheprocessofacquisitionofgoodsandservices.Itincludessourcing,purchasingandallactivitiesfromidentifyingpotentialsuppliersthroughtodeliveryfromsuppliertotheusers.Itisfavorablethatthegoodsorservicesareappropriateandthattheyareprocuredatthebestpossiblecosttomeettheneedsofthepurchaserintermsofqualityandquantity,time,andlocation.
Suppliers-thisisapersonidentifiedandawardedacontractbyabuyingorganizationtoprovidegoodsorservicesatafee.Theyareidentifiedthroughasupplierselectionprocess.Theprocessshouldbecarriedoutthroughatransparentwaytoensurethatsuppliesareofhighquality.
Supplierselectionprocess-thisisthesystematicwayofidentifyingandselectingsuppliers,itiscarriedoutbythebuyingorganization;itiscarriedoutaccordingtotherulessetoutinthePPDA.
Purchasing:Thespecificfunctionassociatedwiththeactualbuyingofgoodsandservicesfromsuppliers
Sourcing:Referstotheprocessingofidentifyingandworkingwithappropriatesuppliers.
LeadTime:Thisisthetimebetweenorderandplacementofmaterialandtheactualdelivery,theshortertheleadtime,thebetterthesupplier.Everypurchasingfirmwillbecomfortablewhentheleadtimeisshortestpossible.Longleadtimehastheimpressionthatthespecificsupplierislessefficientorhejusthasmorecustomersthanhecanservethusdelayingdeliveries.
Procurementfunction-thisistheprocurementdepartmentinanorganization.
Healthsector-thisdealswiththephysical,mentalandsocialwell-beingofthepublicforexamplecureorremedytodiseases.
ABSTRACT
Thepurposeofthestudywastodeterminetheeffectsofsupplierselectiononprocurementperformanceinthepublichealthsector.AcasestudyofEldamaRavineSub-countyRefferalHospitallocatedatEldamaRavineTownBaringoCounty.Theresearcheraimedatfindingouttowhatextentcost,servicelevels,andsuppliersprofileaffectprocurementperformanceinpublichealthsector.Thestudyusedresearchdesign,whichwasapplicableforthestudy,asthestudyfocusedonassessingtheeffectsofsupplierselectiononprocurementperformanceinpublichealthsector.Thetargetpopulationforthestudywas15procurementemployeesinEldamaRavineSub-countyHospitallocatedatEldamaRavineTown.Theresearcherusedsurveymethodsinconductingthestudy.ThiswasinformedbythefactthatthenumberofstaffworkinginprocurementinERHwasknown.Thedatacollectedwasanalyzedusingmainlyfrequencytables,percentagesandpiecharts.
Thetopicentailsfourchapters.Chapteroneentailsintroduction,backgroundofthestudy,organizationprofile,globalperspective,regionalperspective,localperspective,statementoftheproblem,objectivesofthestudy,generalobjectives,researchquestions,significancescopeofthestudy,limitationofthestudyandtheassumptionofthestudy.Chaptertwocontains;introduction,theoreticalreview,analytichierarchyprocesstheory,attributeutilitytheory,conceptualframework,supplierprofile,financialstatus,price,distributioncost,servicelevel,leadtime,deliveryresponsetocustomer,procurementperformance,efficiency,deliverytime,effectiveness,empiricalreview,critiqueofliteraturereview,researchgapsandsummaryofliteraturereview.Chapterthreeentails;researchmethodology,researchdesign,targetpopulation,sampletechnique,datacollection,pilotstudy,validityofresearchinstrument,reliabilityofresearchinstrumentanddataanalysis.Chapterfourhas;dataanalysis,findings,interpretationoffindings,summaryoffindings,conclusionandrecommendations.
Contents
DECLARATION………………………………………………………………………………………………… i
DECLARATIONBYTHESTUDENT………………………………………………………………………. i
DEDICATION…………………………………………………………………………………………………… i
ACKNOWLEDGEMENT……………………………………………………………………………………. ii
ABBREVIATIONS……………………………………………………………………………………………. iii
DEFINITIONOFTERMS…………………………………………………………………………………….. iv
ABSTRACT……………………………………………………………………………………………………… v
CHAPTERONE…………………………………………………………………………………………………. 1
1.0INTRODUCTION………………………………………………………………………………………….. 1
1.1.BACKGROUNDOFSTUDY……………………………………………………………………………. 1
1.1.2ORGANIZATIONPROFILE………………………………………………………………………….. 2
1.1.2GLOBALPERSPECTIVEONSUPPLIERSELECTION………………………………………… 3
1.1.3REGIONALPERSPECTIVEONSUPPLIERSELECTION…………………………………….. 3
1.1.4KENYANPERSPECTIVEONSUPPLIERSELECTION……………………………………….. 4
1.2STATEMENTOFTHEPROBLEM……………………………………………………………………… 5
1.3OBJECTIVES……………………………………………………………………………………………….. 6
1.3.1GENERALOBJECTIVES……………………………………………………………………………… 6
SPECIFICOBJECTIVES……………………………………………………………………………………… 6
1.4RESEARCHQUESTIONS……………………………………………………………………………….. 6
CHAPTERTWO………………………………………………………………………………………………… 9
2.0LITERATUREREVIEW………………………………………………………………………………….. 9
2.1INTRODUCTION………………………………………………………………………………………….. 9
2.2THEORETICALREVIEW……………………………………………………………………………….. 9
2.2.2MULTIPLEATTRIBUTEUTILITYTHEORY………………………………………………….. 10
2.3CONCEPTUALFRAMEWORK………………………………………………………………………. 10
2.3.5SERVICELEVELS…………………………………………………………………………………….. 12
2.3.6PROCUREMENTPERFORMANCE……………………………………………………………… 12
2.6RESEARCHGAPS……………………………………………………………………………………….. 15
CHAPTERTHREE……………………………………………………………………………………………. 16
3.0RESEARCHMETHODOLOGY………………………………………………………………………. 16
3.1INTRODUCTION………………………………………………………………………………………… 16
3.2RESEARCHDESIGN……………………………………………………………………………………. 16
3.3TARGETPOPULATION……………………………………………………………………………….. 17
3.4SAMPLETECHNIQUE…………………………………………………………………………………. 17
3.6PILOTSTUDY…………………………………………………………………………………………….. 18
3.6.2RELIABILITYOFRESEARCHINSTRUMENT………………………………………………… 18
CHAPTERFOUR……………………………………………………………………………………………… 20
4.0DATAANALYSIS,INTERPRETATIONOFFINDINGS,SUMMARYOFFINDINGS,CONCLUSIONSANDRECOMMENDATIONS…………………………………………………………………………………………………………………….. 20
4.1INTRODUCTION………………………………………………………………………………………… 20
4.2RESPONSERATE………………………………………………………………………………………… 20
4.3PILOTSTUDY…………………………………………………………………………………………….. 21
4.3.1RELIABILITYTEST………………………………………………………………………………….. 21
4.4DEMOGRAPHICRESULTS…………………………………………………………………………… 22
4.4.1GENDEROFRESPONDENTS……………………………………………………………………… 22
4.5DESCRIPTIVESTATISTICS………………………………………………………………………….. 24
4.5.1FINANCIALEVALUATIONOFSUPPLIER…………………………………………………….. 24
4.5.2SERVICELEVEL………………………………………………………………………………………. 24
4.5.3SUPPLIERPROFILE………………………………………………………………………………….. 25
4.5.4PROCUREMENTPERFORMANCE……………………………………………………………… 26
4.5.5INTRODUCTION……………………………………………………………………………………… 26
4.5.6SUMMARYOFSTUDYFINDINGS……………………………………………………………….. 27
4.5.7CONCLUSIONS……………………………………………………………………………………….. 29
4.5.8RECOMMENDATIONS……………………………………………………………………………… 30
4.5.9LIMITATIONS…………………………………………………………………………………………. 31
4.5.10SUGGESTIONSFORFURTHERRESEARCH………………………………………………… 31
REFERENCES………………………………………………………………………………………………… 32
APPENDIXONE………………………………………………………………………………………………. 33
QUESTIONNAIRE…………………………………………………………………………………………… 33
INTRODUCTION……………………………………………………………………………………………. 33
SECTIONA:GENERALINFORMATION……………………………………………………………… 33
SECTIONB…………………………………………………………………………………………………….. 34
SUPPLIERPROFILE………………………………………………………………………………………… 35
PROCUREMENTPERFORMANCE…………………………………………………………………….. 35
APPENDIXTWO……………………………………………………………………………………………… 36
WORKPLAN………………………………………………………………………………………………….. 37
APPENDIXTHREE………………………………………………………………………………………….. 38
BUDGET……………………………………………………………………………………………………….. 38
.
CHAPTERONE
1.0INTRODUCTION
ThisstudyentailedassessmentoftheeffectsofsupplierselectiononprocurementperformanceinpublichealthsectorinKenya.Thechapterentailsthebackgroundofthestudy,statementoftheproblem,objectiveofthestudy,researchquestionsandsignificanceofthestudy,thescopeofthestudy,thelimitationofthestudyandtheassumptionsofthestudy.Thisguidedtheresearcherinconductingthestudyinaccordancewiththelaiddownprocedures.
1.1.BACKGROUNDOFSTUDY
Accordingto(Garry,2014),supplierselectionisameanofanalyzingandcomparingcurrentsupplierwiththenewlyacquiredoneswiththeaimofselectingonewhowillsatisfytherequirementoftheprocurementdepartment.Yousefatal,(2016)furtherdefinedsupplierselectionasaprocessofchoosingtherightsupplierwhichinvolvesmuchmorethanscanningaseriesofpricelistdependingonawiderangeoffactorssuchasvalueformoney,qualityandreliabilityandservices.
TheawardingofpublicprocurementcontractsisregulatedbythePublicProcurementAct,whichspecifiestherulesunderwhichthepublicprocurementshouldbeperformedandsetsconditionsofawardproceduresofpubliccontracts.Thequalityofexecutionprocedureinfluencestheefficiencyandtransparencyofthecontracts.Provisionofhealthfacilitieswithdrugsandmedicalsuppliesisaverycomplexprocessthatinvolvesalargevarietyofactorsfromboththeprivateandpublicsectors.Government’shealthministry’softenlackthemanagementskillsrequiredtopreparepropertechnicalspecifications,supervisecompetitivebidding,andmonitorandevaluatethecontractperformance.Corruptioncanoccuratanystageoftheprocessandinfluencedecisionsonthemodelofprocurement,onthetypeandvolumeofprocuredsupplies,andonspecificationsandsupplierselectioncriteriaultimatelycompromisingaccesstoessentialqualitymedicines.
1.1.2ORGANIZATIONPROFILE
EldamaRavineSub-countyHospitalisapublichospitallocatedatEldamaRavineTown.Offeringthemedicalandclinicalservicestothesubjectsofthecountry.Belowisasummaryofitssupplyandpurchasingstructure
1.1.2GLOBALPERSPECTIVEONSUPPLIERSELECTION
Globally,countrieslikeRussia,ChinaandUSA,thefollowingfactorsaffectssupplierselectionprocess;multiplesupplierselectioncriteria;conflictingviewsontheselectioncriteriatouse,involvementofmanysuppliersintheprocess,internalandexternalproblemsintheprocess.
However,inRussia,supplierselectiondecisionsintricateduetothefactthatmultiplecriteriamustbeconsideredinthedecisionmakingprocess.Multicriteriaapproachisusedintheselectionofsuppliers;(Weberandcurrent2011).
Althoughtherearenumerouscriteriausedinselectingsuppliersdependingonorganizations,manyhospitalsinRussiasuggeststhatthemostimportantareprice,lead-timeandquality.Comparatively,inbothChinaandUSA,nearly90%ofhospitalsbasetheirsupplierselectionprocessonquality,on-timedeliveryandresponsivenesstocustomerneeds,Chaoetal(2013)andmummalanenietal(2016)
1.1.3REGIONALPERSPECTIVEONSUPPLIERSELECTION
Regionally,inGhanaforinstance,therearemanyfactorsaffectingthesupplierselectioncriteria,andsomeofthemare;poorawardingofcontractswhichleadstounreliablesuppliers,corruptionwhileundertakingthesupplierselectionprocess.However,manyhospitalsinGhanahasputinplacethemeasurestoremedythisconstrains.HospitalsinGhanastrictlyandseriouslyadheringonPPDAAct663of2003,whichservesasaguidethatprovidesguidelineandprocurementprocedureforpublicprocuremententitiestoensurejudicious,economicandefficientuseofstateresourcesensuringthatpublicprocurementiscarriedoutinafairtransparentandnon-discriminatorymanner.Nigeriaalsoisnotleftbehind,amongothermethodsofsupplierselection,Nigerianhospitalsfocusontechnicalqualificationsandcompetency;financialresourcesand;equipmentandotherphysicalfacilities;managerialcapabilities,reliabilityandreputationoftheemployeestoperformprocurementcontractasprovidedforunder(PPDAAct663of2003),incarryingoutsupplierselectioncriteriaforeffectiveprocurementperformance.
Comparatively,inSouthAfricanhospitals,supplierselectionexerciseshouldconsider;ethics,humanrights,environmentandcommunityandworkplacesafetyanddiversity,aslaiddownbyCarter(2014),(LyonsandFarrington,2015)onengagingineffectivesupplierselectionprocesssoastoachieveeffectivepurchasingandeffectiveprocurementperformance.
1.1.4KENYANPERSPECTIVEONSUPPLIERSELECTION
Accordingtohealthsectorperformancereport2013and2014healthinstitutionsareailingfromshortageofdrugsorholdingonexpireddrugs.Publichealthcentersanddispensariesarehardlystockedwiththerecommendeddrugs.Itindicatesthathighrateofexpireddrugsindispensariesandotherpublichospitals,poorplanningandhighwastageofpublicresourcesinthecountiesthisaffectsefficientdeliveryofqualityservices.Supplierselectioninprocurementisanimportantpartofefficientmanagementandsupplyandreductionofwastageiscriticalforalloflevelhealthinstitutions.AneffectivesupplierselectionprocessensurestheavailabilityoftherightMedicalsintherightquantities,availableatrighttimefortherightpatientandattherightpricesandatrecognizablestandardsofquality(WHO,2007).
ThepublichealthsectorinKenyaisorganizedandimplementedthroughanetworkoffacilitiesorganizedinapyramidalpattern.Thenetworkstartsfromdispensariesandhealthclinics/postsatthebottom,uptothehealthcenters,sub-districthospitals,districthospitalslevel4,provincialgeneralhospitalslevel5andattheapexthereistheEldamaRavineSub-countyHospital.TheMinistryofHealth(MOH)isthemajorfinancierandproviderofhealthcareservicesinKenya.
ThepreparationofCountryProcurementAssessmentReport(CPAR)byateamofGovernmentofficials,WorldBankanddonorstaff,andnationalconsultants,revealsthatsubstantialinefficiencyinpublichealthsectorandconcludesthatthevalueformoneyisnotachieved.Themainfindingsofthe2002CountryPortfolioPerformanceReviewofWorldBankprojectsalsoreviewedslowprojectimplementationanddisbursementamongotherfactorsdueto,alargeextentofpoorsupplierselectioninprocurement,non-transparentprocurementproceduresandpoorawardingofcontract.
AtERHtherearevariousissuesidentifiedwhichincludesshortageofdrugs,poorspecificationsandineffectivemedicalequipmentwhichdoesnotsuitthehospitalsrequirements.Poorsupplierselectionprocesses,poorawardingofcontractswhichleadtounreliablesuppliers.
Supplierselectionencompassesactivitiesusedtoevaluatecapabilitiesofpotentialsuppliersandtoselecttheminordertoconfigureabuyer’ssupplychainforlong-termcompetitiveadvantage.Supplierselectioniscritical(Lao,HongandRao2010)asfirmsarebecomingmoredependentonsuppliers.Theevaluationsandselectionofsupplierscanbeappliedtoavarietyofsuppliersthroughoutthewholeprocessofproductlifecycletotheenduser.
Procurementisacriticalprocessthatpertainstheallocationofbudget,invitationofbids,evaluation,contractaward,contractadministration,performanceevaluationandreporting.Itishighlyalogicalprocessthatplaysabigroleininfluencingtheultimatepriceandcost.
Globally,manyauthorsagreethatthefollowingfactorsareprevalentinmakingthesupplierselectionprocessdaunting;multiplesupplierselectioncriteria,conflictingviewsontheselectioncriteriatouse,involvementofmanysuppliersintheprocess,internalandexternalproblemsintheprocess.Sincetheeffectiveprocessmustdealwithalltheseproblemseffectivelybothqualitativeandquantitative,ourobjectiveistoinvestigatefactorsaffectingsupplierselectioninprocurementofgoods,servicesandworksinpublicorganizationsinKenya.
1.2STATEMENTOFTHEPROBLEM
ThepreparationofCountryProcurementAssessmentReport(CPAR)byateamofGovernmentofficials,WorldBankanddonorstaff,andnationalconsultants,revealsthatsubstantialinefficiencyinpublichealthsectorandconcludesthatthevalueformoneyisnotachieved.Themainfindingsofthe2002CountryPortfolioPerformanceReviewofWorldBankprojectsalsoreviewedslowprojectimplementationanddisbursementamongotherfactorsdueto,alargeextentofpoorsupplierselectioninprocurement,non-transparentprocurementproceduresandpoorawardingofcontract.
EldamaRavineSub-countyHospitalisnotanexception.Variousprocurementissueshavebeenidentifiedsuchaspoorqualityofdrugsandmedicalequipment,latedeliveries,shortageofdrugsandequipment,expireddrugsstillinstore.Thesearesomeoftheissuestriggeredtheresearchertoundertakethisstudy.
BeilandRoss2009,arguethatpoorsupplierselectioncriteriawillcostthefirmalotoflossesduetorecalls,warrantycostsandinventoryadjustmentshavebroughtaboutdamagestofirmsontheirreputationsandfuturesalespotentials.Toavoidsuchnegativeconsequences,itisimportanttohaveeffectivescreeningprocessthatwillhelptoidentifythetopnotchsuppliersbeforeawardingthecontract.
1.3OBJECTIVES
1.3.1GENERALOBJECTIVES
ThegeneralobjectiveofthestudywastodeterminetheeffectsofsupplierselectiononprocurementperformanceinthepublichealthsectorinEldamaRavineSub-county.
SPECIFICOBJECTIVES
- To find out how financial evaluation influence supplier procurement performance of Eldama Ravine Sub-County.
- To evaluate how effects of ethics influence supplier procurement performance of Eldama Ravine Sub-County.
- To establish how accountability influence supplier procurement performance of Eldama Ravine Sub-County.
1.4RESEARCHQUESTIONS
- How does financial evaluation influence supplier procurement performance of Eldama Ravine Sub-County?
- How does effects of ethics influence supplier procurement performance of Eldama Ravine Sub-County?
- How does accountability influence supplier procurement performance of Eldama Ravine Sub-County?
ThisstudywassignificantinthesensethatitputsintoperspectivetheexactdeterminantsforsupplierselectioninEldamaRavineSub-countyHospital.Thestudyisofsignificancetosuppliersofgoodsasitshedlightonwhatthepublicorganizationsconsiderinasupplierbeforeawardingacontracttoanysupplierwhatsoever.Thestudyisalsovaluabletobusinessconsultantsandentrepreneurshiptrainersasithelpbusinessesdevelopcapacitiesinthekeyaspectsthatthepublicprocuringentitiesconsiderbeforeselectingsuppliers.Thestudyenablesmorefirmsdobusinesswithpublicprocuringentities.Thestudyalsoprovideddirectiontoresearchersindevelopingatheoryofbuyer’sbehavior.FurtherthestudyisverysignificantinthesensethatitcanserveasavertablesourceofinformationforpolicymakersinKenyaandacrosstheAfricancontinentonhowtoimprovethesupplierselectionqualities.
1.6SCOPEOFSTUDY
ThestudywasbasedondeterminingtheeffectssupplierselectiononprocurementperformanceinpublichealthsectorinKenyatakingthecasestudyofEldamaRavineSub-countyHospital.ThestudywascarriedoutbetweenthemonthofMayandAugustoftheyear2021
1.7LIMITATIONSOFTHESTUDY
Studyofthisnatureisnotexpectedtobewithoutlimitations.Someoftheselimitationsinclude:
Poorquestionnairefilling:Theemployeesfilledinthequestionnaireswithouttakingintomindtheseriousnessrequired.Pooransweringofquestionnairesmayleadtowrongoutcomesafteranalysisiscompletedandspoilageofthequestionnairesmayaddintothecosthencedistortingthebudget.
Lackofparticipationofallstakeholders:Inourresearch,datacollectioninstrumentswepreparedwereintendedtotargetemployeestakingpartinprocurementandtheChiefProcurementOfficer,therefore,otherstakeholderlikethesupplierswerenotabletoexpresstheiropinion.
Unavailabilityoftherespondents:Whenconductingdatacollection,therespondentswerebusyorunavailabletofillthequestionnairesduringthetimeweconductedthefieldwork.
Samplesize;thesamplepopulationstudiedwasonlybeenlimitedtooneorganizationbasingontimeandfinancialconstraints.
Secrecyofinformation;confidentialitysurroundingoperationofmanyentitiesmadeithardforstafftodiscloseinformationneededsincewewereconsideredasoutsiderstotheentity.
1.8ASSUMPTIONSOFTHESTUDY
Thestudyassumedthatallpublicinstitutionsemploythesameprocedureswhenselectingsuppliers.Theseinclude;
- Pre-qualificationstageofsuppliers
- Tendering
- Contractaward
- Thesamplepopulationselectedandtherespondentsgavetherequiredinformationforthestudy,anditwashonest.
CHAPTERTWO
2.0LITERATUREREVIEW
2.1INTRODUCTION
Thischaptercoveredthefollowing:theoreticalreview,empiricalreviewandconceptualframework.Literaturereviewistheprocessofidentifying,evaluating,synthesizingandpresentingrelevantinformationfromotherresourceslikepublicationjournalsandmagazines(MugendaandMugenda,2003).Thischapterexaminedpreviousstudiesregardingsupplierselectioninpublicorganizationsandaimedinidentifyingthegapsthatneededtoberesearchedon.
2.2THEORETICALREVIEW
Thischapterhighlightsthetheoriesusedbytheotherresearchersthatarerelevanttothestudy.
2.2.1THEANALYTICHIERARCHYPROCESSTHEORY
TheanalytichierarchyprocesswasdevelopedbySaaty(2001),whichisapowerfultoolinsolvingcomplexdecisionproblems.TheAHPhelpstheanalyststoorganizethecriticalaspectsofaproblemintoahierarchicalstructuresimilartoafamilytree.
Byreducingcomplexdecisionstoaseriesofsimplecomparisonsandrankings,thensynthesizingtheresults,theAHPnotonlyhelpstheanalyststoarriveatthebestdecision,butalsoprovidesthemwithaclearrationaleforthechoicesmade(Chinetal.,1999).IntheAHPapproach,thedecisionproblemisstructuredhierarchicallyatdifferentlevelswitheachlevelconsistingofafinitenumberofdecisionelements.Theupperlevelofthehierarchyrepresentstheoverallgoal,whilethelowerlevelconsistsofallpossiblealternatives.Themaingoalofeveryorganizationistoselectasupplierthatwillhelpinboostingitsprocurementperformance.Thistheoryhelpstheresearchertoevaluatethemostimportantvariablessuchascost,suppliersprofileandservicelevel.
Thistheoryalsohelpsdecisionmakerstoprioritizetheirneedsdependingontheirimportancetotheorganization,andtoselectthesupplierswhocansupplyatafavorablecostwhichwillboosttheorganizationsprocurementperformance,thesuppliersshouldalsoofferthebestservicesandtheirprofileshouldbegood.
2.2.2MULTIPLEATTRIBUTEUTILITYTHEORY
Basically,supplierselectionisacomplexdecision-makingprocess.Thecomplexitystemsfromamultitudeofquantitativeandqualitativefactorsinfluencingsupplierchoicesaswellastheintrinsicdifficultyofmakingnumeroustradeoffsamongthesefactors.Multipleattributeutilitytheoryenablesthedecisionmakertostructureacomplexproblemintheformofasimplehierarchyandtosubjectivelyevaluatealargenumberofquantitativeandqualitativefactorsinthepresenceofriskanduncertainty.ThemajorstrengthofMultipleAttributeUtilityTheoryisitsabilitytodealwithbothpredictableandrandomdecisionenvironments(Butler,2001).
Thistheorywillhelptheorganizationtomakethebestdecisionsonthesupplierforexample,asuppliercanhaveaslightlyhighercostthanothersbuttheirleadtimeisshortandtheirservicelevelisgoodandtheystillcanbeofferingavarietyofservicescomparedtosupplierwhosequotationislowbuthavealongerperiodofdeliveryandofferslessservices.Thistheorywillhelpthedecisionmakertochoosethebestamongsuchsuppliers.
2.3CONCEPTUALFRAMEWORK
Thisisadiagrammaticrepresentationofhypothesizedrelationshipbetweenindependentdependentvariablesofthestudy(Mugenda)
Independent variables Dependent variable
Technicalevaluation |
Financial evaluation |
Ethicsonprocurement |
Effectsofaccountability |
Procurementperformance |
Figure2.3.0ConceptualFramework
2.3.1FINANCIALEVALUATION
(Supplierprofile)
2.3.2PROCUREMENTPERFORMANCE
2.3.3TECHNICALEVALUATION
(Servicelevel)
- Leadtime
- delivery
- Responsetocustomers
2.3.4SUPPLIERSPROFILE
Pasthistoryofsuppliershelpsinmakingdecisioninsupplierselection.Agoodhistorymeansthatthesupplierhasmoreexperienceinwhathedoesanditimpliesthatthesupplierhasagreaterprobabilityofperforminghistasksasrequiredascomparedtoasupplierwhoseprevioushistorywithclientsistaintedwithcomplaintsandpoorperformance.Theelementshereinclude;
2.3.4.1FINANCIALSTATUS
Financialcapabilityofasuppliercanbescreenedbyobtaininginformationabouthisannualturnoverandhisfinancialstructureinaccordancetopasthistory.Economicstatusofsupplier’scountrycanaffectrateofexchangeandlocalpricecontrol.Thismayresultinhigherhiddencostasinthecaseofinternationalsourcingduringsupplierselection.Agoodsuppliershouldhavegoodfinancialbase.
2.3.4.2PRICE.
Anorganizationrequirestheminimumpriceoftheproducttoincreaseprofitability.Itmustthereforefindalowcostsupplybasewhereitcanminimizecost.
2.3.4.3DISTRIBUTIONCOST.
Thisaffectanorganizationasitcontainschannelcost,distributionexpenses,inventorycost,handlingcostsandeveninsurancecost.Sinceanorganizationneedstoacquiregoodsandservicesatleastcostpossible,costmanagementbringsalotofbusinesstosupplierswhoofferleastcost.
2.3.5SERVICELEVELS
Theperformanceofthesupplierinprovidingserviceisthecriteriatodecideitssuitabilityforaparticularproduct.Forahigherprocurementperformance,thesupplierselectedmustofferbettercomplementaryservicesasidefromjustpricingsuchasreliability,intimedeliveryandefficiency.Itisthereforeimportanthencetoconsiderthesefactorsbeforeselectinganysupplier.Thisareanalyzedusingthefollowingattributes;
2.3.5.1LEADTIME
Thisreferstothetimebetweenorderandplacementofmaterialandtheactualdelivery.Theleadtimeshouldbeshortaseveryorganizationiscomfortablewhentheleadtimeisshorter.Longleadtimecansignifythatasupplierprofileislessefficientthusdelayingdeliveries.
2.3.5.2DELIVERY.
Suppliershouldbeabletofollowthedeliveryscheduledefinedinadvance.Supplierswhoareabletokeeppromisesareeasierinprofitableinworkingwiththem.
2.3.5.3RESPONSETOCUSTOMERS
Supplyshouldefficientlyandtimelyrespondtoandcustomerschangebehavior.Incaseemergencyoccursandcustomersraiseanorder,suppliershouldrespondtoitwithoutanydelaysoastoenhancesmoothoperations
2.3.6PROCUREMENTPERFORMANCE
Theaimofeveryorganizationistoutilizescarceresourcesinthemostefficientandeffectivemannersoastoachieveitsobjectiveswithminimalcosts.Thisnecessitatestheevaluationofsupplierssoastoensurethataninstitutiongetsthebestcontractsintermsofquality,costs,flexibilityandreliability.AccordingtoWalkerandRawlinson(2008),themeasurementofprocurementperformanceisthefirststepinbeingabletounderstandtheweaknessesandstrengthsofagivensystemandputintoplacecorrectiveactions.Developinganeffectivemethodformeasuringtheperformanceofprocurementrequirescertainindicatorstomakeevaluationpossible.
Theindicatorsofprocurementperformanceincludeefficiencyintheprocurementprocessmeasuredintermsofthecostoftransactionsandtime.Procurementperformanceisameasureofidentifyingtheextenttowhichtheprocurementfunctionisabletoreachtheobjectivesandgoalswithminimumcosts.VanWeele(2002)notedthattherearetwomainaspectsoftheprocurementperformance:effectivenessandefficiency.ProcurementeffectivenessasdefinedbyVanWeele(2002)istheextenttowhichthepreviouslystatedgoalsandobjectivesarebeingmet.Itreferstotherelationshipbetweenactualandplannedperformanceofanyhumanactivity.Additionally,heexplainsthatprocurementefficiencyistherelationshipbetweenplannedandactualresourcesrequiredtorealizetheestablishedgoalsandobjectivesandtheirrelatedactivities,referringtotheplannedandactualcosts.Asaresult,supplierperformanceisthemostimportantprocurementperformancedriver.
2.3.6.1EFFICIENCY
Accordingtovanweele(2002),theprocurementefficiencyistherelationshipbetweenplannedandactualresourcesrequiredtorealizeestablishedgoalsandobjectivesandtheirrelatedactivitiesreferringtotheplannedandactualcosts.Asaresult,procurementefficiencyisoneofthemainaspectsofprocurementperformance.
2.3.6.2DELIVERYTIME
Anotheraspectofprocurementperformanceisthedeliverytime.Theshorterthedeliverytime,theeffectivetheprocurementperformanceandviceversa.Deliverytimealsoindicatestowhatextenttheprocurementperformanceisabletheobjectivesandgoalsandobjectiveswithminimumcosts.
2.3.6.3EFFECTIVENESS
Procurementefficiencyasdefinedbyvanweele(2002)istheextenttowhichthepreviouslystatedgoalsandobjectivesarebeingmet.Itreferstotherelationshipbetweenactualandplannedperformanceofanyhumanactivity,asaresult,supplierperformanceisthemostimportantperformancedriver.
Previousempiricalstudiesshowthatfromempiricalfont,comprehensiveeffortshavebeenmadetodevelopdecisionmethodsandtechniquesforsupplierselection.Weber(2001)reviewedandclassifiedthe74articlesthatappearedsince1966withregardtoparticularcriteriausedinsupplierselection(Mendoza,2007).Inthispaperswhatcomeoutasmajorsupplierselectiondeterminantsinclude;price,deliverytime,qualityandproductioncapacityandlocation.Degreareeta(2000)usesthetotalcostofownership(TCO)astheframeworkforcomparingsupplierselectionmodels.2.5CRITIQUEOFLITERATUREREVIEW
Kamenya(2014)didaresearchonrelationshipbetweensupplierevaluationandperformanceinlargemanufacturingfirmsinEldamaRavineSub-countyandrevealedthatthereisapositiverelationshipbetweenthetwo;KamenyainhisstudyfailedtoextentthestudytovarioushospitalsinEldamaRavineSub-countysoastotouchonrelationshipbetweensupplierevaluationandprocurementperformanceinpublichealthsector.Nasra(2014)didaresearchseekingtoestablishtherelationshipbetweenprocurementperformanceandoperationefficiencyinthetelecommunicationindustryinKenya.Thestudydidnotlookattherelationshipbetweenprocurementperformanceandoperationsefficiencyinhospitals(publichealthsector)MwikaliandKavale(2012)didaresearchonfactorsaffectingsupplierselectionprocessinmanufacturingfirms,butthestudyfailedtoconsiderpublichealthsectorsoastoincludehospitalsinthestudy.Aseka(2010)didastudyonsupplierselectioncriteriaandperformanceofmanufacturingfirmslistedintheEldamaRavineSub-countystockexchange.ThestudydidnotconsiderthesupplierselectionandprocurementperformanceinthehospitalslistedinhealthsectorlistedinEldamaRavineSub-countyCounty,thusthefindingsarenotapplicable.
2.6RESEARCHGAPS
Alotofresearcheshavebeendoneonsupplierselectionprocessandtheireffectsinprocurementperformanceofanyorganization.Chemjor{2015}conductedaresearchonsupplierevaluationcriteriaandprocurementperformanceinparastatalsinKenya.
Wambui{2014}didaresearchofsupplierselectioncriteriaandsupplychainperformanceinnon-governmentalorganizationinKenya,Aseka{2010}didastudyonsupplierselectioncriteriaandperformanceofmanufacturingfirmslistedinEldamaRavineSub-countyStockExchange.Allthisstudieshavefoundpositiverelationbetweeneffectivesupplierselectionandorganizationalperformance.Thesestudiesillustratedthatfirmsconsideredquantitativefactorssuchassuppliertechnicalexpertise,commitmenttoquality,andabilitytomeetdeliveryduedateinsupplierselectionratherthanqualitativefactorssuchassupplierwillingnesstoshareconfidentialinformation.
Thesepreviousstudiesagreeonthevitalrolesupplierselectionprocessplayindeterminingprocurementperformanceinpublicinstitutions.However,therestillexistsomeuncertaintiesinthewholeprocessofsupplierselectionresultingtopoorperformanceinprocurementactivities.
ThisstudyaimedatdeterminingtheeffectsofsupplierselectionprocurementperformanceinpublichealthsectorinKenya.ItalsoaimedtounderstandprocurementperformanceinEldamaRavineSub-countyHospital.
2.7SUMMARYOFLITERATUREREVIEW
Underthischapterbothempiricalandtheoreticalexistingliteraturesarereviewedinthechapterandalsodiscussedtheresearchfindingsarisingfromthepreviousresearchers,aswellaseffectsofsupplierselectiononprocurementperformancerelatedtheories.egtheanalyticalhierarchyprocesstheory.Thechapteralsoentailstheconceptualframeworkwhichenablestheclearidentificationofindependentvariables.
Thechapterconcludesbyevaluatingcritiquesofliteraturesoastoshowthattheresearchisuniquefromtheresearchesofrelatedtopics,finally,thechapterconcludeswiththesummaryofliteraturereview,soastohighlightall
CHAPTERTHREE
3.0RESEARCHMETHODOLOGY
3.1INTRODUCTION
Thischapterrepresentsthemethodsthatwereusedtocollect,analyzeandinterpretdata.Itfurtherprovidesinformationregardingthetargetpopulation,samplesize,samplingdesign,datacollectioninstruments,proceduresandthetechniquesusedindataanalysis.
3.2RESEARCHDESIGN
Aresearchdesignistheplanandstructureofinvestigatingsoconceivedastoobtainanswerstoresearchquestions(Kothari,2004).Aresearchdesignfunctionsastheresearchblueprintformeasurementandanalysisofdata(Creswell,2003).Assuch,itisusedtoshowhowthemajorpartsoftheresearchprojecti.e.thesamples,measurementofvariables,treatmentsorcontrols,andmethodsofassignmentworktogethertotrytoaddressthecoreresearchquestions.
Basically,therearedifferenttypesofresearchdesign,andtheapplicationofeachoneisdeterminedbytypeandsizeoftheproblembeinginvestigated.Forthepurposeofthisstudytheresearcherwillmainlyapplytheuseofquantitativedataalthoughqualitativewillalsobeadopted.Thisapproacheswillbeadoptedbecauseofthenatureofthestudywherebyqualitativewillbeneededfordescriptivedataandquantitativewillbecompulsoryfornumericaldataandtheywillbothbeofferedindepthanalysisofvariablesthatwillbestudied.So,theresearcherwillbeflexibleindatacollectiontechniquesaswellasanalysis.
Thepurposeofthisstudywastoanalyzefactorsaffectingsupplierselectionandtheireffectsonprocurementperformance;itsoughttodescribethephenomenaasitexists.Therefore,researchdesignwillbeusedasitisdeemedtobethemostappropriate.
Variousauthorsrecommendtheuseofdescriptivedesign(e.g.seeOrodho,2004;Dane,2000)toproduceinformationthatisofinteresttopolicymakerseveninbusiness.Thedescriptiveresearchdesignwillalsohelpsavetimeandmoney.
3.3TARGETPOPULATION
Apopulationisthetotalcollectionofelementsaboutwhichinferencesaremadeandreferstoallpossiblecaseswhichareofinterestforastudy(Sekaran,2003).
ThetargetpopulationsforthestudyweretheemployeesattheEldamaRavineSub-countyHospitalinprocurementdepartment.Thestudyalsotargetedthechiefprocurementinthisorganizationastheunitofanalysisbecausehe/sheisalsotaskedwiththeresponsibilityofsourcingforsuppliesofgoodsandservicestotheirorganization.Thetargetpopulationswere40employees.ThestudyusedsurveytogatherinformationbecausethetotalnumberofemployeesinERHprocurementfunctionwasknown;italsoencompassedtheuseofsamplingsincequestionnaireswereissuedtoasampleofthepopulationintheprocurementfunction.
3.4SAMPLETECHNIQUE
Samplingreferstothesystematicselectionofalimitednumberofelementsoutofatheoreticallyspecifiedpopulationofelements.
Asamplesizeof15respondentsofthepopulationwastakenaccordingtooursampleformula.Thiswasinformedbytheprinciplethatiftheelementsofapopulationarequitesimilar,onlyasmallsampleisnecessarytoaccuratelyportraythecharacteristicsofinterest.Therationaleistodrawconclusionsabouttheentirepopulation.AccordingtoKothari(2004),theultimatetestofasampledesignishowwellitrepresentsthecharacteristicsofthepopulationitpurportsto.Thereasonforsamplinginthisstudyistolowercost,accessibilityofstudypopulationandthegreaterspeedofdatacollection.
Samplingwasusedbecauseitensuresagreaterstatisticalefficiencyandreducessamplingerror.
Formulatoobtainasample
Thisresearchusedprimarymethodsofdatacollection.Primarymethodsofdatacollectionusedwerethequestionnairesasthemaininstrument.ThequestionnaireadministeredwasdividedintosectionAandB.Thatis,Aincludedquestionsongeneralinformation,SectionBincludedhowcostaffectssupplierselection,howservicelevelsaffectsupplierselection,howsupplier’sprofileaffectssupplierselectionBoththeemployees’andchiefprocurement’squestionareasaredividedintofivesections.Questionnairesgavetheresearchcomprehensivedataonawiderangeoffactors.Bothopen-endedandclosed-endeditemswereused.Questionnairesallowedforgreateruniformityinthewayquestionsareaskedandensuredgreatercompatibilityintheresponses.
Thequestionnaireswereadministeredbytheresearcherinordertohelpclarifyissuesormisunderstandingthattherespondentmayhave.Therespondentsweregivenatimeframewithinwhichtheywererequiredtorespondtothequestionnairewiththeresearcherpresenttohelpandcollectthequestionnaireuponcompletion.
Theuseofquestionnairesforprimarydatacollectionhasbeensupportedbymanyscholarsamongthem;Mugenda(1999),andPeil(1995).Aquestionnaireiseasiertoadminister,lesscostly,andensuresgreaterdepthofresponse,accordingtoMugenda(1999).Aquestionnairealsohelpscapturefactualinformationeffectively.Forthepurposeofthisstudy,thequestionnairewasusedforthemainlyeconomical,andappropriatenessreasons.
3.6PILOTSTUDY
Schindlerandcooperdefinedpilotstudyasatestasanactivitythatenablestheidentificationofflaws,weaknessesorevenlimitationsinresearchinstrumentshenceenablingtheresearcherstomakenecessarychangesandcorrectionbeforefinalstudyimplementation;(Kohari,2004).Inthisregard,thestudyconductedapilotstudyof40ofemployeesfromprocurementfunctionatERH.Thiswasenhancingathoroughtestingofvalidityandreliabilityofdatacollectioninstruments.Pilottestingassessthevalidityandreliabilityofthedatacollectioninstrumentshenceenablestheresearchertoamendontimetheadoptedresearchinstrumentstofacilitateaccuratefinaldatacollection.
3.6.1VALIDITYOFRESEARCHINSTRUMENTS
AccordingtoLindner,MurphyandBriers(2001),researchinstrumentsvalidityisthedegreetowhichthestudysampleoftestitemsactuallyfullyrepresentsthedesiredcontentsthattheyaredesignedtomeasure.Nevertheless,thisstudyperformedcontentvaliditysoastomeasurethedegreebywhichthecollectedresearchdatarepresentsspecificcontent.Alternatively,theengagementofaprofessionalexpertintheparticularfieldofinterestwascarriedoutsoastoobtainopiniontobeusedtoascertainthevalidityofthedesignedresearchinstruments.
3.6.2RELIABILITYOFRESEARCHINSTRUMENT
AccordingtoCronbach(1951)reliabilityisbasicallytheconstituencyofmeasurementofitems.Reliabilityisessentiallythedegreetowhichdesignedresearchinstrumentsmeasuresinthesamemannereachandeverytimeunderthesameconditionwiththesamesubjects.Ameasureisdeemedtobereliableifitprovidesconsistentresultwitheachrepetition.Thisstudyadoptedtheinternalconsistencymeasuredreferredtoascronbach’salpha.Thisisaco-efficientthatmeasuresinternalresearchinstrumentsreliability.Aco-efficientvalueabove0.7impliesthattheresearchinstrumentsarereliablehencetheresearchercanproceedusingtheminthefinalstage.
Dataanalysisistheprocessofputtingthecollectedinformationinaformthatcanbeunderstoodbythepersonundertakingtheresearch.Thestatisticalmethodusedinthisstudyisdescriptiveandinferentialstatistics.Tables,piechartsandgraphswereusedtopresenttheresultsonvariousvariablesinthestudy.Descriptivestatisticssuchasmode,meanandmedianwasusedtopresentthevariouscharacteristicsfordatasetsafterthedescriptiveanalysis.Forthiskindofstudy,descriptiveanalysiswasthebestandhasbeensupportedbysuchscholarsasSchindler(2001),andCrawford(1995).Responsesfromquestionnaireswereorganizedaccordingtopertinentaspectsofthestudy.Johnson(2003)pointsoutthatmassivequantitativedatacollectedfromquestionnairesandobservationneedstobeorganizedwithsignificantpatternstorevealtheessenceofthedata.Responsestotheclosed-endeditemsinthequestionnaires,responsesandobservationdatawereanalyzedandrecordedquantitatively.Thatistheywereeditedandcoded.Theclosed-endeditemsinthequestionnaireswereanalyzedandreportedusingdescriptivestatisticssuchasfrequenciesandpercentages.Gay(2010)observesthatthecomplexityofanalysisisnotanindicatorofitsgoodness.Hethereforerecommendeduseofsimplestatisticsratherthanthemorecomplicatedone.Alltheresponseswereorganizedinthepertinentaspectsofthestudy,thatis,theywerevalidated.Theywerecheckedforcompletenessintermsoferrorsandomissions,inadequacy,illegibilityandirrelevantresponses.Structuredquestionnairesandsecondarydatawerecodedtofacilitatestatisticalanalysis.Descriptivestatisticssuchasmean,percentages,standarddeviationandfrequencydistributionwereusedtoenabletheresearchermeaningfullydescribethedistributionofmeasurements.Othersincludedpiecharts,tablesandcharts.
CHAPTERFOUR
4.0DATAANALYSIS,INTERPRETATIONOFFINDINGS,SUMMARYOFFINDINGS,CONCLUSIONSANDRECOMMENDATIONS
4.1INTRODUCTION
Thischaptercoversdataanalysisandinterpretationoffindings.Thechapteraddressesthegeneralinformationaboutrespondents,thefindingsgeneratedfromthestudy,descriptiveandinferentialstatistics.
4.2RESPONSERATE
Atotalof15respondentswereinvolvedinthestudyfromwhich15oftherespondentsfilledthequestionnairewithapercentagerateof100%whereas0%ofquestionnaireswerenotresponsive.Forthisreason,thestudyestablishedthattheresponseratewasconsideredexcellent.
ThisisasshowninTable4.2
TABLE4.2:RESPONSERATE
Response | Frequency | Percent |
Response | 15 | 100 |
Non-response | 0 | 0 |
Total | 15 | 100 |
Basedonthefigure4.1.5,therespondentswereaskedtoindicatetheireducationallevel.Accordingtothefindings,0%oftherespondentswereholdersofcertificatelevel,33.33%oftherespondentswereholdersofdiplomas,60%weredegreeholderswhile6.67%wereholdersofPHD.Thisindicatesthatmostoftherespondentswereholdersofdegrees.
4.3PILOTSTUDY
4.3.1RELIABILITYTEST
TABLE4.3.1MODELSUMMARY | ||||
Model | R | RSquare | AdjustedRSquare | Std.ErroroftheEstimate |
1 | .545a | .297 | .105 | 2.63825 |
Predictors:(Constant),X3,X1,X2DependentVariable:Y |
Fromtheresultsinthetable4.5.1above,thethreeindependentvariablesthatwerestudiedexplainstheprocurementperformanceby29.7%asrepresentedbyR2,thisimpliesthatthethreeindependentvariablesonlycontributesto29.7%oftheprocurement,whileotheraspectsnotcoveredinthisresearchcontributesto70.3%oftheprocurementperformance
Theresearchertestedamultipleregressionanalysistofindoutthecorrelationinvolvingtheindependentvariablesofsupplierselectionandtheboundariesofprocurementperformanceofthehospital.
Table4.3.2Validitytest | ||||||
Model | UnstandardizedCoefficients | StandardizedCoefficients | T | Sig. | ||
B | Std.Error | Beta | ||||
1 | (Constant) | 4.723 | 7.352 | .642 | .534 | |
X1 | -.449 | .475 | -.338 | -.947 | .364 | |
X2 | .845 | .526 | .548 | 1.608 | .136 | |
a.Predictors:(Constant),,X1,X2 b.DependentVariable:Y |
X2=Servicelevel
X3=supplierprofile
Thevalueofβ0indicatesthatthelevelofprocurementperformancewhenallexplanatoryvariablesareatzerois4.72.Thedataexaminedaswellshowsthat,obtainingalltheindependentvariablesatzero,aunitincreaseinservicelevelofsupplierswillleadtoa0.338increaseinprocurementperformancewhileaunitincreaseinsupplierprofilewillleadtoa0.526increaseintheprocurementperformanceofthehospital.Theseresultsinferthatsupplierprofilecontributesmoretotheprocurementperformancefollowedbyservicelevel.
4.4DEMOGRAPHICRESULTS
4.4.1GENDEROFRESPONDENTS
FIGURE4.4.1GENDEROFRESPONDENTS
Therespondentswereaskedtoindicatetheirresponseongender.Accordingtothefindings,67%oftherespondentsweremalewhile33%werefemalerespondentsasshownontable4.1.Theinterpretationderivedfromthestudyrevealedthattherewasbalance.
4.4.2LEVELOFEDUCATION
Levelofeducation | Frequency | %frequency |
Certificate | 0 | 0 |
Diploma | 5 | 33.33 |
Degree | 9 | 60 |
PHD | 1 | 6.67 |
Others | 0 | 0 |
4.4.3YEARSOFWORKEXPERIENCEOFRESPONDENTS
Numberofyears | Frequency | %frequency |
Below1year | 2 | 13.33 |
1year-2years | 5 | 33.33 |
3years-4years | 5 | 33.33 |
Above4years | 3 | 20 |
Basedontheresearchfindingsfromfiguretherespondentswereaskedtoindicatetheworkexperienceinformofyears.Accordingtothefindings,13.33%oftherespondentshadlessthan1yearsofexperience,33.33%werebetween1to2years,33.33%oftherespondentswerebetween3to4years,and20%oftherespondentswereabove4years.
4.4.4DESIGNATIONOFTHERESPONDENTS
Designation | Frequency | %frequency |
Toplevel | 1 | 6.67 |
Middlelevel | 9 | 60 |
Lowerlevel | 5 | 33.33 |
Others | None | 0 |
Basedonthefigure4.1.4,therespondentswereaskedtoindicatetheirpresentdesignationposition.Accordingtothefindings,6.67%werefromtoplevelmanagement,60%weremiddlelevel
4.5DESCRIPTIVESTATISTICS
4.5.1FINANCIALEVALUATIONOFSUPPLIER
Statement | Mean | Std.Deviation |
Supplierselectionaffectstheprocurementperformanceofanorganization | 4.066667 | 0.883715 |
Thetechnicalevaluationofsupplieraffectstheprocurementperformance | 3.733333 | 0.703732 |
TherearestrategiesinplacetoensurecostsareproperlyminimizedinKenyatta | 4.133333 | 0.743223 |
Thecostsincurredintheorganizationareproperlyaccountedfor | 3.933333 | 1.162919 |
Averagemean | 3.966667 |
Fromthefindingsintable4.2above,Supplierselectionaffectstheprocurementperformanceofanorganization(Mean=4.07,SD=0.883715),thisisbecausetherearestrategiesinplacetoensurethatcostisproperlyminimized(4.13,SD=0.743223),andcostincurredintheorganizationarewellaccountedfor(Mean=3.93,SD=1.16),thehighstandarddeviationsimpliesthattherewaslowlevelofconcurrenceamongtherespondents.Supplier.Thesupplierselectionprocessalsoaffectstheprocurementperformanceoftheorganization.Theaveragemean3.97impliesthattherespondentsagreedthat,costaffectstheprocurementperformance.
4.5.2SERVICELEVEL
Statement | Mean | Std.Deviation |
TheservicelevelofsuppliersisconsideredduringthesupplierselectionprocessinKenyatta | 4.2 | 0.414039 |
Theservicelevelofsuppliersaffecttheprocurementperformanceoftheorganization | 4.066667 | 0.798809 |
Evaluationofservicelevelofsuppliersiscarriedoutbeforeselectionoftherightsuppliers | 4.266667 | 0.883715 |
Strategieshavebeenputinplacetoensuresuppliersmeetstheexpectedservicelevels | 4.066667 | 0.798809 |
Averagemean | 4.15 |
Fromtheoutcomesinthetable4.3,theaveragemean4.15impliesthattherespondentsagreedthatsupplierselectionprocessaffectstheprocurementperformance.Strategieshavebeenputinplacetoensuresuppliersmeetstheexpectedservicelevels(Mean=4.07,SD=0.798809),whichincludeevaluationofservicelevelofsuppliersbeforeselectingtherightones(Mean=4.27,SD=0.883715)andconsideringservicelevelbeforeselection(Mean=4.2,SD=0.414039).Thelowstandarddeviationimpliesthattherewasahighlevelofconcurrenceamongtherespondentsontheirperception.Theservicelevelofsuppliersaffectstheprocurementperformanceoftheorganization(Mean=4.067,SD=0.798809)
4.5.3SUPPLIERPROFILE
Statement | Mean | Std.Deviation |
Supplierprofileaffectsthesupplierselectionprocessinanorganization | 4.266667 | 0.593617 |
ThereareeffectivestrategiesputinplacetoensuresuppliersprofileiswellevaluatedinKenyatta | 3.866667 | 0.915475 |
Supplierswiththebestsupplierprofilearegivenfirstconsiderationduringtheselectionprocess | 4 | 0.654654 |
Theorganizationhasputmeasurestoensuresthatthereiscontinuousimprovementinsupplier’sprofile | 4.333333 | 0.816497 |
Averagemean | 4.116667 |
Fromtheoutcomesintable4.4,anaveragescoreof4.12impliesthat,therespondentsagreedthatsupplierprofileaffectsthatprocurementperformance.ThereareeffectivestrategiesputinplacetoensuresuppliersprofileiswellevaluatedinKenyatta(Mean=3.87,SD=0.915475),Supplierswiththebestsupplierprofilearegivenfirstconsiderationduringtheselectionprocess(Mean=4,SD=0.654654)andtheorganizationputmeasurestoensuresthatthereiscontinuousimprovementinsupplier’sprofile(Mean=4.33,SD=0.816497).TheSupplierprofileaffectsthesupplierselectionprocessinanorganization(Mean=4.27,SD=0.593617)thelowstandarddeviationimpliesthattherewasahighlevelofconcurrenceamongtherespondentsontheirperception.
4.5.4PROCUREMENTPERFORMANCE
Statement | Mean | Std.Deviation |
Suppliersdeliverbestquality | 3.666667 | 0.899735 |
Wegetvaluefromsuppliersatcompetitiveprices | 3.866667 | 0.743223 |
Highdiscountsonpurchases | 3.8 | 0.861892 |
Reducedcostsinacquiringgoods | 3.4 | 0.736788 |
Ontimedeliveriestoreducedelays | 3.333333 | 1.046536 |
Averagemean | 3.613333 |
Theaveragemean3.61inthetable4.5showsthatprocurementperformancehasbeenaffectedbysupplierselection.Thisisbecausetheorganizationfrequentlyassessestheprocurementperformance(Mean=3.866667,SD=0.743223)thisisbecausesuppliersdisplayreliabilitywhileexercisingtheirduty(Mean=3.8,SD=0.861892)andtheyareefficientintheirwork(Mean=3.4,SD=0.73446788),therespondentswereneutralonthat.TherespondentsneitheragreeingnordisagreeingthattheprocurementperformanceofEldamaRavineSub-countyhospitalwassatisfactory(Mean=333,SD1.046525)thehighstandarddeviationimpliesthattherewasalowlevelofconcurrenceamongtherespondentsontheirperception.
4.5.5INTRODUCTION
Thischaptermainlyoutlinesthesummaryofstudyfindings,theconclusions,recommendationsmadebasedonfindings,limitationofthestudyandthesuggestionsforfurtherstudies.
4.5.6SUMMARYOFSTUDYFINDINGS
Theresearcherdividedthestudyintothreepartsonthequestionnaire;firstly,responserateandgeneralinformationofrespondents,thesecondpartcontainedsupplierselectionfactorsatEldamaRavineSub-countyhospitalwhilethelastsectioncontainedtheprocurementperformanceofKenyattahospital.
Fromthefindings,15questionnairesthatwerefrontedtotherespondentswerecompletedandreturned.Thisrepresentedaresponserateof100%.Thisresponseconsideredsufficientforthestudy.Thestudyalsoestablishedthat67%oftherespondentsweremalewhile33%werefemale.66.66%oftherespondentshadbeenemployedintheorganizationforover2years.ThisthereforedemonstratesthattheyhadadequateinformationregardingtheeffectofsupplierselectiononperformanceofKenyattahospital.Thestudyfurtherestablishedthatmostoftherespondentsweremiddlelevelmanagers(60%)andlow-levelmanagers(33%).60%oftherespondentswereinprocessionofuniversitydegrees,33.33%haddiplomasand6.67%hadacquiredPhD.Thisindicatedthatmostoftherespondentshadknowledgethetopicunderstudyandhowprocurementperformanceintheorganizationwasaffectedbythesupplierselectionfactors.
TheresearchersoughttoassesstheeffectofsupplierselectiononprocurementperformanceofKenyattahospital.ThefindingsrevealedthatcostofsupplierselectionhighlyinfluencedprocurementperformanceofEldamaRavineSubcountyhospital.ItwasclearthatEldamaRavineSub-countyhospitalhadbeenputinplacetoimproveprocurementperformancewithameanof4.133,supplierselectionprocess(3.733),supplierselection(4.0667)andprocurementauditsandaccountingaffectedprocurementatameanof(3.9667).Choiceofsupplierselectionandstrategiestominimizehighlyinfluencedprocurementperformancewithameanof4.067and4.133respectively.Ameanof4-5indicatedthatthefactorinquestionhighlyinfluencedperformanceofKenyattahospital.Thefindingsfromregressionanalysisindicatethatbyobtainingalltheindependentvariablesatzero,aunitincreaseincostwillleadtocorrespondingincreaseinprocurementperformanceby0.287.ThefindingsofthisstudyrelatestothatofMwikaliandKavale(2012)whosoughttoidentifythefactorsaffectingsupplierselectionillustratedthat;theyconcludedthatcostassessment,organizationalprofile,servicelevels,supplierprofileandriskfactorsarethemajorfactorsaffectingselectionofsupplierselection.
TheresearchalsosoughttoassesstheeffectofsupplierservicelevelsonprocurementperformanceinEldamaRavineSubcountyhospital.Anaveragemeanof4.15indicatesthatservicelevelsofthesupplierhighlyinfluencedprocurementperformance.Supplierservicelevelwasconsideredhighlyinselectionprocesswithameanof(4.2).Thefindingsrevealedthatsupplierservicelevelsaffectedprocurementperformanceandthatstrategieswereputinplacetoensuresuppliersmettheselectionlevelcriteriawithameanof4.06667.Afurtheranalysisrevealedthataunitincreaseinservicelevelofsuppliersledtocorrespondingshiftinprocurementperformanceby0.338.ThestudywasthereforeabletoanswerthequestionthatsupplierservicelevelsaffectprocurementperformanceofEldamaRavineSub-Countyhospital.
Theresearchersoughttoassesstheeffectofsupplierprofileonprocurementperformance.Performancehistoryofsuppliershelpsinmakingdecisiononwhethertoretainasupplierorsourcefornewcompetitivesuppliers.Anaveragemeanof4.11667indicatesthatsupplier’sprofilesignificantlyaffectsprocurementperformanceofEldamaRavineSub-countyhospital.Continuousimprovementonthepartofthesupplierisconsideredatameanof4.3333.Supplier’sprofileisalsoconsideredinselectionofasupplierwithameanof4.2667.Supplierswithgoodperformanceprofileareusuallyselectedameanof4.Onthelowestpartareadequatecriteriaandstrategiestoassesssupplierprofilebeforeselection.Thefindingsrevealthatsupplierprofilewasthehighestfactorininfluencingprocurementperformance.AunitvariationinsupplierprofileleadstoanincreaseinprocurementperformanceofEldamaRavineSub-countyhospitalby0.526.
TheresearchsoughttoassesshowprocurementperformanceofEldamaRavineSub-countyhospitalandhowitisaffectedbysupplierselectionfactors.AccordingtoWalkerandRowlinson(2008),themeasurementofprocurementperformanceisthefirststepinbeingabletounderstandtheweaknessesandstrengthsofagivensystemandputintoplacecorrectiveactions.Fromtheoperationaldimension,procurementperformancerelatestothecostsofpurchasing,productand/orservicequality,deliveryandflexibilityinprocurement(Nair,Jayaram&Das,2015.AccordingtoBarsemoi,MwangagiandAsienyo(2014),poorprocurementperformancecontributestodecreaseinprofitabilityintheprivatesectorhenceisamajorhindrancetotherealizationoforganizationalgrowthasitleadstodelaysindelivery,lowqualitygoodsandservicesandincreaseindefects.Supplierprofile,servicelevelsandcostofsupplierselectiononprocurementperformancewerethevariablesconsideredusedtoassesstheireffectonprocurementperformance.Procurementperformancewasmeasuredinseveralways;qualitysupplies(3.6667),competitiveprices(3.8667)andhighdiscountsonpurchases(3.8).Whenallfactorsarekeptconstantat0,procurementperformanceofEldamaRavineSub-countyhospitalstandsat4.723.
4.5.7CONCLUSIONS
TheaimofthestudywastodeterminetheeffectofsupplierselectiononprocurementperformanceofEldamaRavineSub-countyhospital.Thefindingsofthestudyrevealedthatallthethreeindependentvariablesthatwerestudiedexplaintheprocurementperformanceby29.7%asrepresentedbyR2.Thisimpliesthatthethreeindependentvariablesonlycontributesto29.7%oftheprocurement,whileotheraspectsnotcoveredinthisresearchcontributeto70.3%oftheprocurementperformanceofEldamaRavineSub-countyhospital.
Thestudydiscoveredthatoutofthethreevariablesaffectingprocurementperformance,supplierprofilewasthemostinfluentialonprocurementperformance.Thefindingsstipulatethataunitchangeinsupplierprofileleadstoasignificantshiftinprocurementperformanceby0.526.AccordingtoMurigi(2014),supplierappraisalhasadirectcorrelationtotheoverallperformanceoftheprocurementprocesswith57.1%oftheperformanceoftheprocurementprocessbeingdirectlydeterminedbythesupplierevaluationandappraisalcriteria.Financiallystablesuppliersposelowerbusinessrisksastheyarelikelytoremainindependentthantheirfinanciallyweakcounterparts(Kipkorir,2013).
Theresearchalsoassessedcostofsupplierselectionasakeyvariableaffectingprocurementperformance.Thefindingsindicatedapositivesignificancebetweencostofsupplierselectionandprocurementperformance.Theanalysisofthevariableindicatedthataunitchangeincostofsupplierselectionleadstoacorrespondingvariationinprocurementperformanceby0.287.ThefindingsofthisresearchconformwiththatofMwikaliandKavale(2012)whotriedtoidentifythefactorsaffectingsupplierselection.Theirstudyconcludedthatacostcriterionisakeyfactoraffectingsupplierselectionforitdictatesamongmanyelements,theprofitmargins.Technicalcapability,qualityofmaterialsandtheprofileofthesupplierarealsocloselyconsidered.
Thestudyalsoestablishedasignificantrelationshipbetweensupplierservicelevelandprocurementperformance.Suppliersservicelevelrelatestoquality,deliveryperformance,continuousimprovementinitiatives,reliabilityandcostreductioninitiatives,Theaveragemeanof4.15indicatedthatsupplierservicelevelinfluencedprocurementperformancetoalargeextend.Aunitincreaseinsupplierservicelevelsleadstocorrespondingincreaseinprocurementperformanceby0.338.ThefindingsofthisstudyrelatestoanotherresearchconductedbyAseka(2010)onsupplierselectioncriteriaandperformanceofmanufacturingfirmslistedintheEldamaRavineSub-countyStockExchange.Thestudyillustratedthat,firmsconsideredquantitativefactorssuchasthesuppliers’technicalexpertise,commitmenttoqualityandabilitytomeetdeliveryduedatesinsupplierselectionthanqualitativefactorssuchassuppliers’willingnesstoshareconfidentialinformation.
4.5.8RECOMMENDATIONS
Fromthefindingsofthestudy,EldamaRavineSub-countyhospitalneedstoputmeasuresinplaceforidentificationandproperselectionofsupplierstomaximizeoverallprocurementperformance.Thestudyobservedthatcostofsupplierselection,supplierservicelevelsandsupplierprofileaffectedprocurementperformancewithameanof3.9667,4.15and4.11667respectively.
Supplierprofilewasthemostsignificantvariableinfluencingprocurementperformance.Ameanof4.11667indicatesthatsupplierprofileinfluencessupplierselectionandoverallprocurementperformancetoalargeextend.Aunitchangeinsupplier’sprofileaffectsprocurementperformanceby0.526.EldamaRavineSub-countyhospitalshouldputitsemphasisonscreeningsupplierspriortoselectiontosupplymaterialsandgoodstotheorganization.Supplier’sprofileshouldincludehisriskprofile,financialperformance,pastaccomplishmentsandcompliancewithlegalandregulatoryrequirements.Thesefactorshaveabearingonperformanceofthesupplierperformanceindischarginghisdutiesaswellasimprovingoverallprocurementperformance.Someofthesupplier’sprofileevaluationcriteriaincludefinancialability,quality,productionfacilities,environmentalissues,supplier’sorganizationalculture,costfactorsproductioncapacityandemployeecapabilitiesamongothers(Lysons&Farrington,2006).
Thestudyalsoestablishedthatcostofsupplierselectionaffectsprocurementperformance.Thegoalofeveryenterpriseistoutilizelimitedresourcesinthemostefficientmannersoastorealizeitsobjectiveswithminimalcosts.Supplierselectionisasignificantprocessforanyorganizationbecauseonaverage,productsthatarepurchasedaccountforbetweenfortyandsixtypercentofsalesoffinalproducts(CharteredInstituteofProcurementandSupply,n.d).Thisdirectlyinfluencethequalityandcostofpurchasedproducts;asmallgainincostduetosupplierselectionhassignificantbenefitsfororganizations.EldamaRavineSub-countyhospitalshouldthereforeensureefficientacquisitionofmaterialsatlowercoststomaximizethebottomlinewhilecreatingvaluefortheorganization.Thiscanbethroughonlinesourcingande-procurementtoreducerepetitiveandpaperintensivetasksthataddtooverallcostofacquiringmaterials.Thereisalsoanincreasingtrendtowardscollaborationbetweensuppliers,buyersandotherpartiesinthesupplychaininabidtoworkjointlytoreducecosts.
ThestudyalsoidentifiedsupplierservicelevelsasakeyvariabledeterminingselectionofsuppliersandhasabearingonoverallprocurementperformanceatEldamaRavinesubcountyhospital.Servicelevelcanbemeasuredindifferentways;reliability,responsetourgencies,ontimedelivery,qualityofservicesoffered,problemresolutionandaspectssuchasroutinecommunication.Asupplierwithexcellentservicelevelcanusuallypromotefasterresolutiontoproblems,reducedconflicts,andbetterdeliveryofcustomerserviceaswellaspromotingharmoniousrelationships.Ifasupplieroffersexcellentservicelevels,itcanleadtocostsavingsandimprovedprocurementperformance.
4.5.9LIMITATIONS
Someofthelimitationsofthestudy:Firstly,theindependentvariablesthathavebeenusedinthisresearcharenotlimitedtothree(3).Thestudystipulatesthatthethreeindependentvariablesthatwerestudiedexplaintheprocurementperformanceby29.7%asrepresentedbyR2.Thisimpliesthatthethreeindependentvariablesonlycontributesto29.7%oftheprocurement,whileotheraspectsnotcoveredinthisresearchcontributesto70.3%oftheprocurementperformance.Secondly,theresearchwasacasestudyofEldamaRavineSub-countyhospitalinBaringoasthecasestudyfortheresearch.ThefindingsmaynotrepresentthetruepictureofthepublichealthsectorinEldamaRavineSub-countyCounty.
4.5.10SUGGESTIONSFORFURTHERRESEARCH
BasedonthefindingsofthisstudythereisneedtoconductfurtherresearchonotherfactorsaffectingprocurementperformanceofpublichealthsectorinEldamaRavineSub-countyCounty.Furtherstudiesshouldbeconductedtoassessthecriteriausedinselectingsuppliersandtheireffectivenessinimprovingprocurementperformance.ThiswillhelptosolvechallengesthatsurroundsupplierselectioninKenya.
REFERENCES
Biel,D.(2009).Supplierselection(unpublishedresearchpaper).StephenM.RossSchoolofUniversityofMichigan,USA.Availableatwww-personal.umich.edu/…/SupplierSelection.
Bail,C.andSarkis,J.(2009).Selectionandsustainability:AGreyRoughSetevaluation(Workingpaper2009-05).GeorgePerkinsMarshInstitute.Beamon,B.(2001).Measuringsupplychainperformance
Mugenda,O.M&Mugenda,A.G.(2003).Researchmethods:Quantitativeandqualitative Approaches:EldamaRavineSub-county:ACTSPress.
http://www.un.org
Quantityallocation(PHDthesis,Michigan.
Motwani,J.andYoussef,M.(2001).Supplierselectionindevelopingcountries:A modeldevelopment.Emerald,10(13):154-162.
Ellram(1990).Thesupplierselectiondecisionsinstrategicpartnerships.JournalofPurchasingandMaterialsManagement.8-14
Ellrams(1995),TotalCostofOwnership:AnAnalysisApproachforPurchasing,InternationalJournalofPhysicalDistributionandLogistics,163-184.
KennethLyson(2001),PurchasingandSupplyChainManagement6thedition.
Cox,L.(1999),Vendorselection,methodsandevaluationcriteria.Theglobalreviewofpurchasingandsupplymanagement4theditionMichiganUSA
Kothari,C.R(2004),Researchmethodologymethodsandtechnique4thedition,newageinternational(p)LimitedPublisher,4835/24AnserineRoadNewDelhiIndia
LiJ,(2000),vendorselectionusingprincipalcomponentAnalysis.Theglobalreviewofpurchasingandsupply.63-69Li,N(2006),Supplierselectionindevelopingcountriesamodeldevelopment,Emerald10(13):154-162
Monczka,TrentandHandfield,(2002.)PurchasingandSupplyChainManagement.2(Ed)
Tan,K.CKannanVIR&Hadfield,R.B(1998),Supplychainmanagement,SupplierperformanceandfirmperformanceinternationalJournalofPurchasingandmaterialmanagement.
APPENDIXONE
QUESTIONNAIRE
INTRODUCTION
IamastudentfromEminingTechnicalTrainingInstituteconductingaresearchonthetopic“Effectsofsupplierselectiononprocurementperformanceinpublichealthsector”.Yourinstitutionhasthereforebeenselectedasacasestudyforthepurposeofthisresearch.Thisisanacademicresearchandtheinformationprovidedispurelyforacademicpurposeandwillbetreatedwithutmostconfidentiality.
Kindlyspendafewminutesofyourtimeandparticipateinourstudybyfillingthequestionnaire.Yourco-operationishighlyappreciated.
SECTIONA:GENERALINFORMATION
(Forthissection,pleasetick( )themostappropriatealternativeandfillinthespaceswhereapplicable)
1.Gender
AMale()BFemale()
2. Howlonghaveyouworkedinthehealthsector?( )
Time | Tick | |
1 | Below7months | () |
2 | 7months–1year | () |
3 | 1.5years-2years | () |
4 | 2.5years-andabove | () |
3.What’syourpresentdesignation?
Toplevelmanagement()
Middlelevelmanagement()
Lowerlevelmanagement()
Others(specify)……….
4.Levelofeducation?
Certificate()
Diploma()
Degree()
PhD()
Others(specify)………
SECTIONB
Useatick(√)
Key:
SA-StronglyAgree
A-Agree
N-Neutral
D-Disagree
SERVICELEVEL
Statement | SA | A | N | D | SD |
TheservicelevelofsuppliersisconsideredduringthesupplierselectionprocessinERH | |||||
Theservicelevelofsuppliersaffecttheprocurementperformanceoftheorganization | |||||
Evaluationofservicelevelofsuppliersiscarriedoutbeforeselectionoftherightsuppliers | |||||
Strategieshavebeenputinplacetoensuresuppliersmeetstheexpectedservicelevels |
SUPPLIERPROFILE
Statement | SA | A | N | D | SD |
Supplierprofileaffectsthesupplierselectionprocessinanorganization | |||||
ThereareeffectivestrategiesputinplacetoensuresuppliersprofileiswellevaluatedinERH | |||||
Supplierswiththebestsupplierprofilearegivenfirstconsiderationduringtheselectionprocess | |||||
Theorganizationhasputmeasurestoensuresthatthereiscontinuousimprovementinsupplier’sprofile |
PROCUREMENTPERFORMANCE
Statement | SA | A | N | D | SD |
ThecurrentprocurementperformanceofERHissatisfactory | |||||
Theorganizationfrequentlyassessestheprocurementperformance | |||||
Thesuppliersdisplayreliabilitywhileexercisisngtheirduty | |||||
Thesuppliersareefficientintheirwork | |||||
Materialssuppliedaredeliveredingoodtimeasagreed |
APPENDIXTWO
Activity | Project Topic | Chapter1 | Chapter2 | Chapter3 | Presentation AndCorrections | Collection OfData | Chapter4 | Chapter5 | Presentation OfReport |
September | |||||||||
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August |
WORKPLAN
APPENDIXTHREE
BUDGET
Activity | Amount |
Stationery Pens Erasers Whitewash | 350 50 100 |
ComputerServices Printing Photocopy Binding | 2500 1000 500 |
Contacts Meetings TransportCost Airtimecost | 5000 3000 4000 |
DataCollection CostofPurchasingdata OtherExpenses | 1000 2500 |
Totals | 20,000 |