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 PresentationTRANSCRIPT
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PURCHASE AND
INVENTORY CONTROL
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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
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FIVE ‘R’ Right Quantity
Right Quality
Right Price
Right Source
Right Time
PRINCIPLES OF PURCHASE
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Carrying cost is more than the additional Margin
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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%
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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
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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
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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
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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
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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
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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
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Suppliers can be Classified into
Fresh produce
Dry Grocery(unbranded)
FMCG products
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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
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Markup Structure
Discrimination
Advertisement / Display Charges
Credit Period
Return / Exchange –(Replacement)
Schemes
Taxation
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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
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LEAD TIME
ORDERING COST
SAFETY STOCK
INVENTORY CONTROL
JUST IN TIME (JIT)
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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
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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
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TRADE CREDITORS PAYABLE
ATLEAST 60 % STOCK HOLDING
PREFERABLY 80 % STOCK HOLDING
IDEALY 100 % STOCK HOLDING
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DALAL
WHOLESALER
RETAILER
TRANSPORTER BOX
GODOWN
PURCHASE ACCOUNTSGODOWN
TELEPHONE / POBill / DO / PO CHEQUE
Bill / DO
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COMPANY
DISTRIBUTORDISTRIBUTOR’S
REPRESENTATIVE
COMPANY’S REPRESENTATIVE
RETAILER
GODOWN OF DISTRIBUTOR
ACCOUNTS DEPT GODOWN
PURCHASE ACCOUNTSGODOWN
PO PO CHEQUE