FACTORS AFFECTING NEGOTIATION AS A COST REDUCTION TOOL OF RAW MATERIALS PURCHASE IN THE MANUFACTURING INDUSTRY: A CASE STUDY OF KAPA OIL REFINING INDUSTRY

Abstract

The aim of the study was to find out factors affecting negotiation as a price reduction tool of raw materials purchase in the manufacturing industry. The general objective of the study was to evaluate factors affecting negotiation as a price reduction tool of raw materials purchase in the manufacturing industry with reference to Kapa Oil Refining Industry. The study intended to achieve the following objectives: to find out the effect of price, quality, capital and training on negotiation as a cost reduction tool of raw materials purchase in the manufacturing industry. The study will benefit the management of Kapa Oil Refining Industry and the Academicians. The researcher used descriptive research design. The study targeted a population of 460 people who were selected from top, middle and support staff levels of management. Stratified random sampling was used to cover the total population and a sample size of 138 respondents was selected randomly. Data was selected from both primary and secondary sources whereby questionnaires and literature review were done respectively so as to get detailed information. Both primary and secondary data was analyzed qualitatively and quantitatively and presented in pie charts, graphs, figures and tables. From the study findings 83% of the respondents were of the view that price affects negotiation as a cost reduction tool while 17% of the respondents disagreed, 85% of the respondents were of the opinion that quality affects negotiation as a cost reduction tool while 15% of the respondents disagreed, 88% of the respondents agreed that capital affects negotiation as a cost reduction tool while 12% of the respondents disagreed and 84% of the respondents were of the view that training affects negotiation as a cost reduction tool while 16% of the respondents disagreed. The researcher recommended that the customer should control price in subtle elements and allocate considerable assets to tie undertaking. Fixed value states add up to price and conveyance information, quality should concern keeping up the strategies and methods of value control, i.e. methodically watching that they are connected effectively. Interior organization evaluation of these issues is frequently called inspecting outside appraisal is alluded to as confirmation; the method for overseeing capital can significantly affect both the liquidity and gainfulness of the organization. The fundamental reason for any firm is to augment benefit and manager as well as other employees who perform non-routine should solve problems on their jobs, reports.