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Wednesday, May 26, 2010

Principle of Purchasing

Basic Principle of Purchasing


1. Right price:
It is the primary concern of any manufacturing organization to get an item at the right price. But right price need not be the lowest price

2. Right quality:
Right quality implies that quality should be available, measurable and understandable as far as practicable
 

3. Right time: For determining the right time, the purchase manager should have lead time information for all products and analyse its components for reducing the same

4. Right source:
The source from which the material is procured should be dependable and capable of supplying items of uniform quality.

5. Right quantity:
The right quantity is the most important parameter in buying. Determine the right quantity after considering factors such as price structure, discounts, availability of the item and make or buy consideration.

6. Right attitude:
The purchase manager should be innovative and his long-term objective should be to minimise the cost of the ultimate product.

7. Right contracts: The buyer has to adopt separate policies and procedures for capital and consumer items.

8. Right material:
Right type of material required for the production is an important parameter in purchasing.

9. Right transportation:
Right mode of transportation have to be identified as this forms a critical segment in the cost profile of an item

10. Right place of delivery: Specifying the right place of delivery, like head office or works, would often minimize the handling and transportation cost.

Keywords: Principle of Purchasing, Purchasing Principle, Good Purchasing factor

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