difference between purchasing and
store department
Answers
Answer:
Going Shopping at a Store
Have you ever wondered when you were walking around your favorite store just how all those great items got here? Who is responsible for the processes needed to put all those products on the shelves?
There are two major departments that find, purchase, accept, store, and provide the right amounts when needed. These are the responsibilities and functions of the purchases and stores departments. In this lesson, we'll look at Sally's Garden Supply and see just how Sally uses her purchasing and stores departments to help her keep products in stock that keep her customers coming back
The Purchasing Department
One of Sally's employees, Tony, runs the purchasing department. Tony is responsible for finding and ordering all of the items that Sally wants to sell in her store. Right now, Sally is planning for her annual ceramic pot sale going on in the spring so that she can attract many new and existing customers who want to put plants inside and outside their homes for the warmer seasons. Sally speaks with her accounting department to find out how much money she has to work with and also her sales manager to find out how many pots they can expect to sell in the next few months.
After conducting her internal research, Sally goes to Tony in the purchasing department with a purchase request (or PR). The PR gives descriptions of the products and the estimated costs for each pot. Many times it will often have a certification from the accounting department that those funds have been set aside specifically for that purchase. Tony will then conduct market research. Market research is when Tony will go out and find out the various sources for the items requested, compare initial prices, shipping costs, standard industry practices, and even compare them to previous purchases for the same items in the past.
In this case, Sally's wanting to place a large order, so Tony puts out a request for quote (or RFQ) to a few different companies who manufacture, distribute, or wholesale ceramic pots. The companies will respond to Tony's RFQ with their prices, and it is possible that, because the order is large (ten pallets of pots), he might try to contact them to negotiate a better price and make use of the economy of scale. An economy of scale is when a seller will take a lower profit margin to sell a lot of a product because they can get better discounts to make more, and it will cost them less per item than it does to produce a smaller batch. Also, the suppliers will likely pay less for their materials when buying in bulk.
When the time for the RFQ is over or when all quotes have been received, Tony will evaluate the quotes, possibly try to negotiate a better price, and then make a final decision from which company they will purchase the pots. Part of the quote should include the cost of shipping the items to Sally's Garden Supply and who is responsible for the items during transit. When a final decision is made, Tony will write the contract for the sale and have all the appropriate people review and sign it to make it legally enforceable.
The company will then produce or ship the items to Sally's Garden Supply's warehouse for receipt. Once the items are received and accepted (if they are not broken), the company can be paid for the items and Tony can move on to working on other purchases
Explanation:
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