Purchasing and Financing 2024

1. Draw a diagram that contains the graphs of:
o the fixed costs of production
o the variable costs of production
o the total costs of production
o the cost of purchasing
2. Determine the quantity that satisfies the condition:
Cost of Purchasing = Cost of Production
Apart from this calculation, other factors must also be considered.
Factors in favour of buying
o Supplier know-how
o Demand is not constant.
o No fixed workforce
o Research constraints
o Storage problems
o Reputation
o Risks
o Decreasing market
Factors in favour of making.
o Desire to integrate plant
operation.
o Direct control over
production/quality
o Design secrecy required.
o Unreliable suppliers
o Future potential
o Potential competitors not enabled.
11. THE PURCHASING ROUTINE
The following routine is only one type of model. A company will use a system that is
adapted to its needs.
STEP 1:
STEP 2:
STEP 3:
STEP 4:
STEP 5:
STEP 6:
STEP 7:
STEP 8:
STEP 9:
STEP 10:
STEP 11:
STEP 12:
The order level is reached.
Possible suppliers are identified.
Possible suppliers are rated.
A supplier is chosen.
Goods are ordered.
The warehouse is informed of expected deliveries.
Goods are tracked to ensure they arrive on time.
Goods are received.
Check if address, supplier, number of items and weight is correct and if
packaging is not damaged.
Acknowledge receipt of a delivery note.
Issue a purchaser’s note.
Check the goods for quality and quantity.
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