PURCHASE AND INVENTORY CONTROL
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PURCHASE AND INVENTORY CONTROL
description
PURCHASE AND INVENTORY CONTROL. PRINCIPLES OF PURCHASE. Quantity. Source. Price. Terms. PRINCIPLES OF PURCHASE. FIVE ‘R’. R ight Quantity. R ight Quality. R ight Price. R ight Source. R ight Time. RIGHT. BEST. Carrying cost is more than the additional Margin. - PowerPoint PPT Presentation
Transcript of PURCHASE AND INVENTORY CONTROL
PURCHASE AND
INVENTORY CONTROL
Rs 1.00 lakh From Company
30% less than MRP Cash
Rs 50,000 From Company
25% less than MRP Cash
Rs 25,000 From Big Wholesaler
20% less than MRP Cash
Rs 20,000 Local Distributor
18% less than MRP Cash
Rs 10,000 Local Distributor
10% less than MRP
15 days Credit
Quantity Source Price Terms
PRINCIPLES OF PURCHASE
FIVE ‘R’ Right Quantity
Right Quality
Right Price
Right Source
Right Time
PRINCIPLES OF PURCHASE
Carrying cost is more than the additional Margin
PURCHASE SHOULD FOLLOW SALE & NOT VICE VERSA
NOTE THE MONTHLY DEMAND OF SKU’s
2 IMPORTANT FACTORS – LEAD TIME & SAFETY STOCK
WEEKLY SALE 1ST WEEK – 40%2ND WEEK – 30%3RD WEEK – 10%4TH WEEK – 20%
SOURCES OF PURCHASEBIGGER STORES PURCHASE DIRECTLY FROM COMPANIES
WHAT IS CORRECT?
CUT THE COAT ACCORDING TO YOUR CLOTH
AS YOU GROW BIG FOLLOW – BACKWARD INTEGRATION
KOOPRA / SABUDANA – SALEM/COCHIN
ALPONSO MANGOES – KOKAN GROWERS
VEGETABLES – NASIK, PUNE.
GRAPES – NASIK
SUJI/BESAN/MAIDA – FLOUR MILL
MEDICINES – PHARMACEUTICAL COMPANY
RIGHT TIMEPLANNING ACCORDING TO THE DEMAND
SUGAR OTHER FMCG RAVA / SUJI
COCONUT MAIDA
SANKRANTI ITEMS
RAKHEE
GANAPATI ITEMS
HOLI ITEMS
KOOPRA
DIVALI ITEMS
RAMZAN ITEMS
MONSOON ITEMS
BEFORE SCHOOL
VALENTINE DAYCRISTMAS ITEMS
SUMMER SPECIAL
1) NO STOCKOUT OR NO OVER STOCKING
2) PURCHASE & RETAIL PRICES ARE COMPETITIVE
3) SALE IS NOT MORE THAN PURCHASE
4) STOCK LEVEL AS PER STOCK HODING POLICY & STOCK TURN RATE
5) QUALITY OF GOODS MAINTAINED
6) TRADE CREDITOR PAYABLE ACCORDING TO NORMS
7) OLD & DAMAGED GOODS ARE RETURNED
8) PURCHASE FOR SEASONAL DEMAND
9) SCHEMES AVAILED OR NOT AVAILED FOR BEST ADVANTAGE OF THE STORE
PURCHASE REVIEW & CONTROL
SUPPLIER LIST
NAME / ADDRESS / TEL.:/ MOB: / EMAIL IDCOMPANIES / BRANDS / SKUs TERMS OF PAYMENTS, EXTRA CREDIT DAYS
EXTRA SCHEMES IF ANYNAME OF THE OWNERNAME OF TSINAME OF ASMNAME OF ASDM
SHOP CLOSED ON / TIMING
COMPANY SCHEME
BUY WHAT YOU SELL
GOODS WELL PURCHASED MEANS HALF SOLD
NEW PRODUCTS AND CONSIGNMENT ARRANGEMENT
BUY THAT MUCH YOU CAN SELL
2% Saving in Purchase is equal to 16% increase in Sale
PURCHASE OF AGRICULTURAL COMMODITIES
Every State has Agriculture Produce Market Act – Market Yard
Dalals or Brokers
Minimum Quantity
Credit Facilities
Adulteration
Quality AssessmentForeign Material Moisture Damaged Grains Insects
Offence under Prevention of Food Adulteration ActHarvest Season Purchase
Cold Storage
Suppliers can be Classified into
Fresh produce
Dry Grocery(unbranded)
FMCG products
One has to study the market practices
Large Retailers may have Backward Integration
Fruits & Vegetable may be purchased from Farmers
FMCG products may be purchased from the Distributors/ Wholesalers
There may be Backward Integration or Outsourcing
Mutton, Chicken, Beef etc from Abttoir
Fish from Landing Jetty
with reference to these categories
Markup Structure
Discrimination
Advertisement / Display Charges
Credit Period
Return / Exchange –(Replacement)
Schemes
Taxation
INVENTORY CONTROL
WHAT IS STOCK ?
WHAT IS INVENTORY ?
INVENTORY HAS INHERENT TENDENCY TO GROW
COST OF INVENTORY OR CARRYING COSTPAYMENT OF INTEREST INSURANCE GODOWN / WAREHOUSING CHARGES
HIGH STOCK HOLDING IS BAD STOCK-OUT IS WORSE
LEAD TIME
ORDERING COST
SAFETY STOCK
INVENTORY CONTROL
JUST IN TIME (JIT)
TECHIQUES OF INVENTORY CONTROL
MINIMUM MAXMUM RE-ORDER LEVEL
FIXED FREQUENCY ORDERING SYSTEM
FIXED QUANTITY ORDERING SYSTEM
FIXED FREQUENCY & FIXED ORDERING SYSTEM
ABC ANALYSIS
ECONOMIC ORDER QUANTITY (EOQ)
RULE OF 10
NO ENTRY TECHNIQUE
ECONOMIC ORDER QUANTITY (EOQ)No. of Orders
Annual (A)Require
OrderingQuantity
Inventory (I)Carr. Cost
Ordering (O)Cost
Total Cost
Rs Rs % Rs Rs
1 1200 1200 90.00 10.00 100.00
2 1200 600 45.00 20.00 65.00
3 1200 400 30.00 30.00 60.00
4 1200 300 22.50 40.00 62.50
5 1200 200 15.00 50.00 65.00
2 A O
3 1200 400 30.00 30.00 60.00
IEOQ = 2 x 1200 x 10 x 100
15 160000= = = 400100
TRADE CREDITORS PAYABLE
ATLEAST 60 % STOCK HOLDING
PREFERABLY 80 % STOCK HOLDING
IDEALY 100 % STOCK HOLDING
DALAL
WHOLESALER
RETAILER
TRANSPORTER BOX
GODOWN
PURCHASE ACCOUNTSGODOWN
TELEPHONE / POBill / DO / PO CHEQUE
Bill / DO
COMPANY
DISTRIBUTORDISTRIBUTOR’S
REPRESENTATIVE
COMPANY’S REPRESENTATIVE
RETAILER
GODOWN OF DISTRIBUTOR
ACCOUNTS DEPT GODOWN
PURCHASE ACCOUNTSGODOWN
PO PO CHEQUE
