Purchase of Materials

PURCHASE OF MATERIALS

The purchasing department of the operations function is about getting and buying the materials and other resources used in the Production Process. This Department must buy the amount of materials they will need and other resources that is needed within a time limit. Before the production takes place they need to have every material needed. The most important part of purchasing is sitting down with all the managers and company employees and try and find a suitable supplier so they can buy the cheapest materials. What the company looks for in suppliers is

1. The suppliers are reliable.

2. Can deliver the correct amount and also deliver on time.

3. The cheapest prices and they will not get over charged.


After the Purchase of Materials department have made their decision on whom the would like their suppliers to be they know have to order in their stock so they can start to make the product. The four main issues the need to look for is:

1. Stock of raw materials that are available as soon as possible.

2. Duration of time it is going to take for the suppliers to deliver the order and also future orders if they decide to keep this supplier

3. The likely amount of raw materials that is needed for this pacific product

4. The space which is needed and the cost to store it.


Once these issues have been considered. The following should be taken into account:

1. Quality – how much you want of the materials
2. Quantity – can the supplier deliver the stock wanted
3. Time – Can the suppliers confirm a time and date for the product to be here.
4. Dependability – how dependable the suppliers are
5. Price - Try and get the lowest price for the stock and ask for discounts
6. Location - are there additional charges for the insurance or delivery


Firms must use the correct mix of the above when deciding on a supplier. This is known as the PURCHASING MIX.

by Int 2 Pupils, Saint Roch's Secondary