![]() ![]() These are the nature of the manufacturing process, the nature of material to be used, prevailing market conditions i.e., changes in the tastes and preferences of the people, cost of materials to be purchased, cost of possession and storing capacity of the organisation.Īlong with the economic order quantity, there are two more concepts, viz. Excess purchases should be avoided, it results in overstocking and capital is unnecessarily blocked and inventory carrying cost goes up.įor dedicing the amount of right quantity to be purchased, certain important factors must be considered by the management. Ensuring and maintaining a regular flow of materials for carrying the production activity is the vital aim of any purchase organisation. The right quantity is the quantity that may be purchased at a time with the minimum total cost and which obviates shortage of materials. Materials purchased should be of right quantity. The best quality of materials purchased need not be the right quality. Thus, the right quality is the suitability of items purchased for a given purpose. The inspection department must verify whether the goods supplied are in accordance with the order placed. However, purchase department may question the requirements of the different departments on the basis of its experience and suggest various alternatives. In case of workshop equipment, the decision is taken by the plant engineer and for stationery it is the user department. Quality for different materials is decided by the concerned departments. ![]() It is the duty of the purchasing department to ensure that materials are purchased from those suppliers.įor creating goodwill, right production, standardisation, elimination of waste and for better results, right quality purchases are very essential. ‘The quality must be built into the product’. The use of standard specification, brand name or trade name helps in purchasing the squired qualities of materials. It can be measured by physical tests, chemical analysis or by any other methods depending upon the nature of a product. The quality of the item is called as grades. ![]()
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