Purchasing and Stores Functions PDF

14. PURCHASING & STORES Purchasing is the procurement of right quality of material at the right time in the right quantity from the right source at the right price. Functions of purchasing department 1. Location and selection of sources of supply: This department locates the vendors and chooses app...

14. PURCHASING & STORES Purchasing is the procurement of right quality of material at the right time in the right quantity from the right source at the right price. Functions of purchasing department 1. Location and selection of sources of supply: This department locates the vendors and chooses appropriate vendors who can supply the materials at the best terms and conditions. 2. Placing the orders: The Purchase Department is responsible for purchasing material at the least cost to the company. Proper quantity and quality of goods must be ordered. 3. Follow up: It takes steps to ensure the supply of goods at the right time. For this purpose, the suppliers are reminded of orders and requested to maintain delivery dates. It is necessary to see that materials are received neither too soon nor too late. 4. Verification of invoices: The invoices received from suppliers are checked to ensure that only the goods actually received are charged and prices charged are correct. Adjustment for claims made on account of goods damaged in transit are made before approving invoices. 5. Miscellaneous Functions Organising discussions with suppliers Interviewing representatives of vendors Maintaining good relations with all the suppliers Maintaining all the necessary records Collecting information about new materials Attending trade shows an exhibitions Warning all the concerned departments if deliveries are not going to be made on stipulated dates Storage means physically keeping the raw materials, parts and finished products in proper condition until they are used up our sold. Functions of Storage Department 1. Issuing requisitions: Different departments send requisitions to the storekeeper. The store keeper consults the stock position and send requisitions to purchasing agent for purchase of materials. 2. Receiving materials: The storekeeper receives materials sent by the supplier and finished products from the factory. 3. Storing materials: All goods are unpacked and checked. They are then stored in proper containers. 4. Issuing materials: The storekeeper issues materials on requisitions duly signed by an authorised person. 5. Miscellaneous functions Selling obsolete materials and scrap Handling claims for damage goods Supervising, receiving, and store keeping operations Carrying out physical stock taking Notifying the inventory control section of out-of-stock conditions. Maintaining all the necessary records