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2.3 Purchasing resources

Should we invest more to acquire resources or not? This question has many dimensions irrespective whether it is to buy information technology or office equipment. A manager needs to consider the specific context and do so with an appreciation for how the organisation manages both tangible and intangible assets.

Let us assume the organisation is confronted with a very poor sales result. The lack of sales success is traced to poor customer loyalty and the inability to provide services or products to meet the individual customer's needs and expectations. The capacity deficiency in the organisation is resulting in critical failure, the loss of customers and sales revenue.

Figure 1 Balancing capacity

Figure 1 Balancing capacity

In the above scenario insufficient capacity has resulted in loss of sales. However, if resources held exceeded current capacity requirements, then this would also generate costs that would impact profits. The need is to plan resources to meet capacity.

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