Three managers are attending a seminar on ‘Getting More Value from Your Purchasing Function

Three managers are attending a seminar on ‘Getting More Value from Your Purchasing Function’. One manager is from a large retail bank, one is from a general hospital and the third is from a printing company. At the seminar they were discussing their problems during coffee.

‘This is really useful; I think that even a relatively small reduction in our bought-in supplies bill could have a major impact on the profitability of our printing company.’

‘Yes, I agree the hospital will also benefit from an exercise that would reduce the bought-in supplies bill. At the moment it accounts for almost 30 per cent of all our expenditure.’

‘Yes, at the bank we spend almost 20 per cent of our expenditure on bought-in supplies. Given that our profit is 20 per cent of our total revenue, any saving in bought-in supplies would be valuable.’

‘I have to say that profits are not so high in the printing industry. Our profits are only 10 per cent of sales revenue. However, with bought-in supplies accounting for 70 per cent of our total costs, I am sure that any reduction in bought-in supplies costs will be useful.’

Which of these three managers would benefit most from a 5 per cent reduction in their bought-in supplies bill?