Although the details of a purchase procedure may differ from concern to concern, the important procedures in purchasing and receiving of materials are as follows; assuming that purchases are centralised: 1. Purchase Requisition 2. Selection of Suppliers 3. Purchase Order and Follow-Up 4. Receipt of Materials 5. Inspection and Testing of Materials 6. Return of Rejected Materials 7. Passing Invoices [...]
Following are the main techniques of materials control: 1. ABC Analysis 2. Determination of stock levels 3. Economic Order Quantity (EOQ) Analysis 4. Perpetual Inventory System 5. Periodic Annual Inventory Control System 6. VED Analysis. Technique # 1. ABC Analysis: The concept of ABC Analysis was coined by Pareto, an Indian philosopher in the nineteenth century. It is a value [...]
The following points highlight the four main inventory systems. The systems are: 1. Perpetual Inventory System 2. Continuous Stock Taking System 3. Periodic Stock Taking System 4. Two Bin System. 1. Perpetual Inventory System: CIMA defines perpetual inventory system as "the recording as they occur of receipts, issues and the resulting balances of individual items of stock in either quantity [...]