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Problem

One purchasing executive observed, “Online auctioning is an appropriate way to buy some categories of products and services but it’s entirely inappropriate for others.” Agree or disagree? Provide support for your position.

Step-by-step solution

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Step 1/2

E-procurement is a digital world innovation in the procurement process. It saves time and enhances the number of alternative bids that can be evaluated. In addition, online procurement initiates reverse auctions.

Step 2/2

Some critics comment that online auction for procurement is only suited for some products, not for all. The main reason behind this is because reverse auction. It is mostly suitable for electronics, automobile, and pharmaceutical industries. This way lower costs on procurement can be made possible. However, the same reverse auction harms the supplier relationship as savings of suppliers are overstated. Thus, the reverse auction is best for commodity-type products alone. The products and materials like diesel, duel, metal parts, and raw materials. The products that are specialized capabilities are not suitable to be traded over online platforms. Only a few suppliers can meet this specific quality and performance. Here, online procurement is cost-consuming without a fair benefit tradeoff. Thus, the statement, online auctioning is an appropriate way to buy only some category of products and services is agreeable.