INVESTING CYCLE

PURCHASE OF EQUIPMENT
INPUT PROCESS OUTPUT COMMENTS

START General Manager Comments and observations from the site and Project Engineers and Manager about the performance of the equipment and the necessity for a new equipment

Assesses whether there is a need to buy a new equipment

Assessment of possible equipment purchase

Assessment of possible equipment purchase

Instructs the Equipment in-charge to look for a supplier of the equipment and make a purchase order

Instruction to make a purchase order

Equipment In-charge Instruction to make a purchase order

Calls for a supplier and asks for price quotation. Compares the prices and identifies a supplier for each purchase. Makes a Purchase Order.

Price Quotation Purchase Order 1 Purchase Order 1 1 2

At times, there is already an identified supplier. Thus, there is no need for the equipment in-charge to make a canvass of the prices.

General Manager Price Quotation Purchase Order 1 Purchase Order 1 1 Approved & Sgd. by General Manager Equipment In-charge Purchase Order 1 1 Approved & Sgd. by General Manager Faxes the approved purchase order to the supplier Purchase Order 1 Approved & Sgd. by General Manager 2 Checks the accuracy of the purchase order, the prices and the supplier identified. Approves the purchase order. Price Quotation Purchase Order 1 Purchase Order 1 1 2 D Purchase Order File

Supplier

PE02

PURCHASE OF EQUIPMENT
INPUT PROCESS OUTPUT COMMENTS

PE01

Liaison Officer Materials In-charge Receives the construction equipment and checks its specifications vis-vis the delivery receipt Test runs are also done and there are instances, when a deed of sale also needs to be executed.

Delivery Receipt 1 1 1
Freight Forwarder

Delivery Receipt 1 1 1

Equipment In-charge Delivery Receipt Sales Invoice 1

Supplier

1 1 1

Receives the sales invoice and makes a voucher payable and attaches the delivery receipt and sales invoice

Voucher Payable Voucher Payable 3 3 1 1 Voucher Payable 2 2 1 Delivery Receipt 11 Sales Invoice 1 11 1

D Voucher Payable File

In instances of cash transactions, full payment is required beforehand. Thus, no delivery receipt is attached. And the Project Manager/ General Manager advances cash for the company for travel to purchase the equipment outside the country.

PE03