It consists of following steps –

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i. Processing the requisition

The departments of co. communicate to the purchase dept. their requirements for various items by requisition form which contains the details of quality and other necessary info. About items and is to be signed by competent authority. It is prepared in duplicate and original copy is sent to the purchase dept.

ii. Location and Choice of suppliers

Potential vendors are contacted by authorized representatives, their sample of items are inspected and examined. On the basis of findings from inspection, suppliers are approved for placing orders.

     iii. Criterion for Choice of Vendor-

  • Reliability of vendor
  • Assurance of timely delivery
  • After sale service
  1. Placing the orders – Purchase dept. try to purchase required items at most advantageous terms, all purchase must be made by purchase order in a specified form duly signed by authorized person. It must contain detail about supplier, description of items, their prices and amounts.
  2. Follow up – Late deliveries can close the company so it is necessary to review the outstanding orders at regular intervals.
  3. Invoices received from suppliers are checked with order specifications.
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