Aishwarya College of Education
Course : B.Com
Class : II Year
Subject : Communication
Unit : II
Basant Kalla B.Com. II Year, Unit – II, Business Communication Page 1
, UNIT - II
PURCHASE MANAGEMENT
There are four types of buyers exists in the market.
1. Manufacturer
2. Wholesaler
3. Reseller
4. Consumer
Meaning – Purchasing means to purchase the product on appropriate time, in appropriate quantity, at
appropriate price and from appropriate medium.
Purchasing is the first phase of Materials Management. Purchasing means procurement of goods and
services from some external agencies. The object of purchase department is to arrange the supply of
materials, spare parts and services or semi-finished goods, required by the organisation to produce the
desired product, from some agency or source outside the organisation. Purchasing is an art, the cost of
material is increased with the lack of purchasing, and the quality of product is also decreased as well as it
decreases the goodwill of the organization.
Definitions:
1. According to Dr. Walters – “Purchasing is the procedure by purchase of proper material,
equipments and stores used in the manufacturing of the product adopted to marketing in proper
quality proper time and at the lowest price with quality desire”.
2. According to Alford and Beatty, “Purchasing is the procuring of materials, supplies, tools and
services required for equipment, maintenance and operations of a manufacturing unit.”
Basant Kalla B.Com. II Year, Unit – II, Business Communication Page 2
, Objectives of Purchasing
1. To pay reasonably low prices for the best values obtainable, negotiating and executing all company
commitments.
2. To keep inventories as low as is consistent with maintaining production.
3. To develop satisfactory sources of supply and maintain good relations with them.
4. To secure good vendor performance including prompt deliveries and acceptable quality.
5. To locate new materials or products as required.
6. To develop good procedures, together with adequate controls and purchasing policy.
7. To implement such programmes as value analysis, cost analysis, and make-or-buy to reduce cost of
purchases.
8. To secure high caliber personnel and allow each to develop to his maximum ability.
9. To maintain as economical a department as is possible, commensurate with good performance.
10. To keep top management informed of material development which could affect company profit or
performance.
11. To achieve a high degree of co-operation and co-ordination with other departments in the
organisation.
Basant Kalla B.Com. II Year, Unit – II, Business Communication Page 3
Course : B.Com
Class : II Year
Subject : Communication
Unit : II
Basant Kalla B.Com. II Year, Unit – II, Business Communication Page 1
, UNIT - II
PURCHASE MANAGEMENT
There are four types of buyers exists in the market.
1. Manufacturer
2. Wholesaler
3. Reseller
4. Consumer
Meaning – Purchasing means to purchase the product on appropriate time, in appropriate quantity, at
appropriate price and from appropriate medium.
Purchasing is the first phase of Materials Management. Purchasing means procurement of goods and
services from some external agencies. The object of purchase department is to arrange the supply of
materials, spare parts and services or semi-finished goods, required by the organisation to produce the
desired product, from some agency or source outside the organisation. Purchasing is an art, the cost of
material is increased with the lack of purchasing, and the quality of product is also decreased as well as it
decreases the goodwill of the organization.
Definitions:
1. According to Dr. Walters – “Purchasing is the procedure by purchase of proper material,
equipments and stores used in the manufacturing of the product adopted to marketing in proper
quality proper time and at the lowest price with quality desire”.
2. According to Alford and Beatty, “Purchasing is the procuring of materials, supplies, tools and
services required for equipment, maintenance and operations of a manufacturing unit.”
Basant Kalla B.Com. II Year, Unit – II, Business Communication Page 2
, Objectives of Purchasing
1. To pay reasonably low prices for the best values obtainable, negotiating and executing all company
commitments.
2. To keep inventories as low as is consistent with maintaining production.
3. To develop satisfactory sources of supply and maintain good relations with them.
4. To secure good vendor performance including prompt deliveries and acceptable quality.
5. To locate new materials or products as required.
6. To develop good procedures, together with adequate controls and purchasing policy.
7. To implement such programmes as value analysis, cost analysis, and make-or-buy to reduce cost of
purchases.
8. To secure high caliber personnel and allow each to develop to his maximum ability.
9. To maintain as economical a department as is possible, commensurate with good performance.
10. To keep top management informed of material development which could affect company profit or
performance.
11. To achieve a high degree of co-operation and co-ordination with other departments in the
organisation.
Basant Kalla B.Com. II Year, Unit – II, Business Communication Page 3
