Read the statement below and answer ALL five questions that follow:

Material costs play a crucial role in determining the overall cost structure of an organization. Effective

management of material costs involves a combination of strategic sourcing, risk management, supplier

relationships, and continuous monitoring of market trends. Organizations that can adapt to fluctuations in

material costs and proactively manage their supply chains are better positioned to maintain competitiveness

and financial health.

You are managing the purchasing department of eThekwini Municipality, in KwaZulu Natal, Durban$-$South

Africa. Answer the following questions focusing on how your position will assist in creating value to the

Municipality in terms of cost reduction when buying its goods and services.

QUESTION ONE $(20$ Marks$)$

Examine the several necessary processes in the purchasing process that will assist in costs reduction at the

Municipality. Use Practical examples to support your answer.