Purchasing

• The basic objective of purchasing function is to ensure continuity of supply of materials and at the same time reduce the ultimate cost of the finished goods. – Right source, Right quality, Right quantity, Right

price, Right time, Right attitude, Right contractual terms, Right mode of transportation etc.

Purchase Procedures• Issuance of Purchase requisition• Review by Head of using dept.• Comparison with Purchase budget• Attachment of commodity purchase record• Examination by Purchasing Dept• Issuance of bid ( Request for Quotation)• Selection of vendors and placement of order• Follow up and expediting• Receipt of goods• Receipt into stores• Performance of supplementary functions• Shipment of end product and disposal of unwanted materials

Centralised purchasing

• It is a method of procurement of all types of materials, supplies, equipments, etc. through a single department (not necessarily centrally located) under the direct control and superintendence of one responsible person.

• He is directly accountable to the Top management for all duties falling within the broad area of Purchase function.

Specilised purchasing methods

• Blanket orders• Stockless buying• Systems contracting• Small order purchases– Purchase under petty cash– Purchase through telephone orders– Purchase under cash-on-delivery system