INTRODUCTION

 All production firms have the need of

supplies of materials and services from
external sources. This makes purchasing,
one of the most significant functions of
any Production Manager. Purchasing
function may include the purchase of Raw
Materials.
 In simple words we can say that
Purchasing is the act of exchange of goods
and services for money or money’s worth.
 DEFINATION
 According
to LEVIS:-
“Purchasing is
the acquisition by manufacture
of any necessary primary
material suppliers, equipments
by any method whatsoever.”
 OBJECTIVES
 To make available materials at minimum
cost
 To maintain the continuity of production
 To establish and maintain good relations
with the suppliers
 Develop alternative source of supply
 To reduced the cost of finished goods
 To maintain proper records for reporting to
the management
 To keep the activity of purchasing with in
the limit of material purchase budget
 To contribute towards higher productivity
Right Source Right Quality Right Quantity

Right Price Right Time Right Place

 RIGHT SOURCE
 The very first issue in PM is the
selection of proper SOURCE.
Allocation factors are dependent
upon the source. A source is proper
only if it can satisfy the customer as
regards other factors
 RIGHT QUALITY
 The another issue purchasing
management is right quality. The manager
must properly define the quality
requirements. Whether quality will be
costly. But in many of cases, cheaper
goods prove out to be costly in the long
run. Thus what is the quality of inputs
desired must be clear in the mind of the
purchase manager. This description then
should be clearly mentioned in the
purchase order. Further once the delivery
is received it should be properly checked
the actual material the specified materials.
 RIGHT QUANTITY
 The another issue in purchasing
management is right quantity. The
issue of quantity generally relates
with the decision as to how much to
purchase. This is more of a
mathematical question. By using
different models regarding inventory
control, the optimum order quantity
has to be decided.
 RIGHT PRICE
 The another issue in purchasing
management is right price. Price is the
major factor for a purchase decision. For
most of the people, price comes first than
even quality. The equation used in this
concern is:-
VALUE = QUALITY/PRICE
This is both a mathematical formula and an
axiomatic truth. It implies that the value &
quality do have a positive relationship
while value & price share an inverse
relationship. It means to say that the lower
the price, the more the value, and vice-
versa.
 RIGHT TIME
 The another issue in purchasing
management is right time. Delivery
schedules are a very-very important
part of effective purchasing. All
purchasing orders should be made
and implemented in such a way that
these are made available in time
when needed. Timing is very crucial
for every part of human activity and
purchasing is not an exception.
 RIGHT PLACE
 The last issue in purchasing
management is right place. Right
place means right place of
delivery. Every purchase contract,
in addition to time of delivery, must
clearly state the place of delivery
and such other terms like free
delivery or ex-factory delivery