Capital purchase justification Assignment Example | Topics and Well Written Essays - 1000 words

Capital purchase justification - Assignment Example The purchase of the equipment is necessary to make the hospital run (Grantham, Haupt, Isbell, McClung, & Rettie, 2005). A CAT scan needs service providers. Selecting a service provider is always the responsibility of the procurement department. The procurement department will find a suitable supplier through researching the market. This will involve market survey on directories, form procurement colleagues, and the Internet. It will be necessary to search for more than three providers to evaluate. One of the economic advantages to deliver the CAT scan is that it will assist in saving cost by comparing prices and deliverability. Selection is made in terms of the provider that in delivering the CAT scan in time. We identified General Electric, Siemens and Medic Exchange. Selection process is done by choosing a provider from the phone book, Internet or using friends and family members. After settling for Siemens, the formal selection process is done. This was evaluation in terms of tech nical and financial evaluation. A contract was signed by the vice president because it was capital equipment which needed high authorization to Siemens to provide the CAT scan needed. It is necessary to the company to analyze the available options for making the right choice. The first step is to document organizational needs by putting the details and specifications by making the Vice President aware of our reasoning’s and justification for our actions. The company analyzed what Siemens could do concerning the CAT scan. The identifying potential sources were also considered by doing research of which organization is capable of providing the CAT scan. Information sent to Siemens is an introduction including contact information. A summary of business needs was prepared by drawing a proposal request for the CAT scan. An invitation to participate was sent to all three vendors for participation in the selection process. The date proposed was for a one-on-one discussion of key iss ues. The third step is to initiate vendor discussions on issues of the site and training or personnel to use the CAT scan. Then non-responsive vendors will be weeded out through both technical and financial evaluation. The fourth step is a final vendor round up. This is the final stage to make an offer and obtain the contract. One of the most important parts of the process is making a decision and sticking to it. This suggests reviewing material facts from the two meetings with each vendor, and a decision is made (Healthcare Financial Management Association (U.S.), 2009). A research article by Grantham et al. points out two aspects on how teams respond favorably to a request for information security budget costs justified with a clear ROI business case. There is also a developing concept of risk based ROI. The concept quantifies taking action of cost and risk associated and how this should be minimized by implementing a proper security infrastructure. This concept is used to purchas e insurance for the CAT scan. If a security breaches occurs as a result of not implementing the proper procedures, the associated costs far outweigh the cost to replace the CAT scan. This was an issue that was addressed with the vice president. To help avoid these liability costs is the goal. This is how the percentage of return on investment (ROI) is calculated. This is often the case when actual security risks are