Chapter 10 STORE OPERATIONS

10.1 RECEIPT OF STORE ITEMS

PROCEDURE FOR RECEIPT OF MATERIALS

All goods (materials, tools, equipment) entering in a factory are received by the store department
(inventory department, warehouse department). The procedure of this department is as follows.
1. Receiving the receipt of all the goods in a ledger called “Goods received book”. It is simply a list
of goods recorded as they are received.
2. Checking of all goods against purchase order for both quantity and quality.
3. Returning all defective goods to the supplier responsible. A copy of rejection note is passed to
purchase department and accounting department.
4. Informing purchase department of the receipt of
goods. This is done by goods received note (GRN). A
copy of this note is also sent to accounting department
for clearance of bills.
5. All goods are further entered in the relevant stock
register.

It is assumed that store department plays the role of

material control.

Receiving and storing goods in order is the primary responsibility of the store department.

10.2 ISSUE OF STORE ITEMS

Issue means the supply of items to another department.

Issuing of goods is made only against authorized requisition. The storekeeper should never issue
materials without any authorized requisition. Such requisitions are commonly made in duplicate. One
copy is passed to storekeeper and the other remains with the “indenter”.

The storekeeper issues the materials and receives signature of the person taking materials. The
requisition is completed/filled by the storekeeper and sent to the accounting department.

Serial Description of Item Quantity Rate per unit Amount Stock

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 No. (Units) Register page
01 MS Bar 50 meters PKR … …. P.52
02 Welding electrode 100 PKR … …. p.23

Issued by XXXX, Store Department Authorized Signature

Received by XXXX, Welding Department

FUNCTION OF STORE DEPARTMENT

1. To maintain efficient level of materials, the stock level of any item should neither be above the
maximum level nor fall below the minimum level.
2. To arrange careful examination of all goods and materials when they are received from suppliers.
3. To arrange all things in a very systematic way in the store in proper order. This enables easy and
prompt distributions of materials.
4. To maintain an efficient and effective system of record keeping and to prevent wastage of materials.

RECEIPT AND ISSUE OF FABRICATED PARTS

There are fabricated parts (engines, tyres, transmissions, etc.) but not finally assembled. Such parts
are temporarily received in store, which are kept separately. Storing of such parts requires a great care
depending upon their nature. These parts are not entered in the stock register. No requisition slip is
needed to issue them. These parts can be issued on a simple material issue note.

BIN CARD

BIN CARD
No. 226
Description of Item: Laptop computer
Date GRN or Material request In Out Balance
number
20 March 1000 0 3 15
22 March 1015 5 0 20
25 March 1022 0 2 18

Signature of storekeeper

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It is a card, which is kept in the bin (shelf) for each item. It records the movement of the item i.e. (in
or out). It is argued that the bin card is a simple tool by which the stock record can be checked very
easily.

QUOTATION

Articles of store listed are needed for college use. Suppliers are requested through press or other media
to quote their rates for the supply of the listed items.
Sr. no Description of items Quantity Unit Rate per unit
1 M.S. Angleiron 50 Kg PKR…./Kg
(1 1/2” x 1 1/2” x 1/2”)
2 Welding electrodes 10 Kg PKR…./Kg
No. 16 B.O.C.

COMPARATIVE STATEMENT

On presenting quotations by various suppliers, a comparative statement is made. It is done to evaluate

the lowest rate item-wise. It helps to decide for the purchase of material.

Sr. Description of Quantity ALI & CO. RAZA& CO. BUTT BROTHERS

no items required

Unit rate Amount Unit rate Amount Unit Amount

PKR/Kg PKR PKR/Kg PKR rate PKR

PKR/Kg

1 M.S. 50 60 3,000 55 2,750 58 2,900

Angleiron

(1 1/2” x 1

1/2” x 1/2”)

2 Welding 10 200 2,000 220 2,200 210 2,100

electrodes

No. 16 B.O.C.

SUPPLY ORDER

After deciding and comparing different rates quoted by suppliers, a supply order is issued. The supplier
is required to supply the material within due time with bill of cost. The acceptance of materials is

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subject to the approval of the intender.
SUPPLY ORDER to RAZA& CO
Sr. no Description of item Unit rate Quantity required Cost
1 M.S. Angleiron PKR 55/Kg 50Kg PKR2,750
(1 1/2” x 1 1/2” x 1/2”)

SUPPLY ORDER to ALI & CO.

Sr. no Description of item Unit rate Quantity required Cost
2 Welding electrodes PKR 200/Kg 10Kg PKR2,000
No. 16 B.O.C

QUESTIONS
1. List the five procedures for receipt of materials.
2. List the four functions of store department.