The Purchasing Initiative

‭The purchasing initiative‬ ‭P urchasing budget or purchasing budget‬ I‭t‬‭is‬‭recommended‬‭the‬ ‭responsibility‬‭for‬ ‭staying‬‭within‬‭the‬‭set‬‭limits,‬‭as‬‭much‬‭as‬ ‭possible‬‭to‬ ‭be‬‭submitted‬‭to‬‭the‬‭requesting‬‭officials‬‭.‬‭The‬‭purchasing‬‭officers‬‭c an‬ ‭then limit themselves to testing against a total budget.‬ ‭The purchasing impulse‬ ‭ ith regard to purchasing impulses, it is useful to make a distinction between:‬ W ‭a. Goods, raw materials and consumables and parts that:‬ ‭1.‬‭Are sold or consumed by the company on a certain regular basis;‬ ‭2.‬‭Not sold or consumed on a regular basis;‬ ‭b. Sustainable means of production;‬ ‭c . Services.‬ ‭ d‬‭a.1‬‭goods,‬‭raw‬‭m aterials‬‭and‬‭consumables‬‭and‬‭parts‬‭that‬‭are‬‭sold‬‭or‬‭consumed‬ A ‭by the company on a certain regular basis‬‭.‬ ‭These goods will also often be kept in stock. In that case, formulas can be drawn‬ ‭up for calculating (by computer):‬ ‭-‬ ‭From the so-called order‬‭level,‬‭that is the stock level at which reordering‬ ‭should take place;‬ -‭ ‬ ‭O f the order‬‭quantity,‬‭that is the size of the quantity to be ordered at that time.‬ ‭The Order‬‭quantity is‬‭the economic or optimal order size. This is achieved at the‬ ‭quantity where the sum of the inventory costs and order costs per time unit is‬ ‭minimum. If it can be established at both the warehouse and the office that the‬ ‭order level has been reached, a good internal control measure is that both report‬ ‭this. In this way, deviations between the office stock administration and the actual‬ ‭stocks can be identified more quickly than would otherwise be the case. However,‬ ‭one must take into account the circumstances that a certain time elapses between‬ ‭a stock change and the processing of this change in the office stock‬ ‭administration. Signaling‬‭by two officials belonging to different departments is‬ ‭c ertainly necessary if it concerns valuable articles, articles that are perishable,‬ ‭articles that change weight for other reasons, such as drying, are subject to this,‬ ‭or if the company's policy is such that 'no' can never be said sold or when the‬ ‭presence of parts is essential for the continuity of production.‬ ‭ d a. 2 Goods, raw materials and consumables and parts that are not sold or‬ A ‭consumed by the company on a certain regular basis‬ ‭W ith regard to these goods etc. it will not be possible to determine order levels‬ ‭and order quantities based on past observations. This circumstance is caused:‬ ‭-‬ ‭By the impossibility‬ ‭to determine the sales pattern.‬‭e thinking falls to companies‬ ‭with‬‭piece production,‬‭such as the production of valuable‬‭capital goods. In that‬ ‭case, the original impulse information comes from sales. Derived impulses reach‬ ‭the purchasing department via a business office or a drawing room.‬ ‭-‬ ‭By the unpredictability‬‭of the nature, shape, appearance, etc. of the items to be‬ ‭ urchased.‬‭This occurs with fashion-sensitive‬‭items,‬‭items to be purchased for incidental‬ p ‭s ales promotions of‬‭department stores, etc. Knowledge of and orientation to the‬ ‭purchasing market is the most important factor here. The‬‭buyer takes therefore‬‭in these‬ ‭ ases the‬‭initiative,‬‭although consultation with the sales department regarding sales‬ c ‭options will remain necessary.‬ ‭Ad b Sustainable means of production‬ ‭ roposals to purchase sustainable assets – whether or not they fit into an‬ P ‭investment‬‭budget‬‭- both when it concerns replacement and when it concerns‬ ‭expansion, must be justified on the basis of guidelines used within the company‬ ‭that apply to investment selection.‬