Materials Purchase Cycle
When a department stock level drops down , the particular department issues purchase request to purchase department in purchase requisition form stating stock item required with specific quantity and other specifications
On receipt of requisition form , purchase department place ORDER with supplier in purchase order form. This form contains all details regarding order specifications along with delivery dates and contract terms. Copies of this form is sent to supplier and warehouse
On receipt of specific order , the warehouse issues GOODS RECEIVED NOTE , stating specifications of goods received and date of goods received. Copy o GRN is sent to purchase department to match it against purchase order so that supplier can be paid to relevant supply of goods. After payment to supplier the purchase cycle comes to an end
Issue to Specific Departments
After purchase, materials are issued to particular departments on presentation of material requisition form, so that’s martials can be used in production of products. This form includes quantity issued to that department along with job number in which it is used. Other important forms include material transfer form(records transfer of materials from one department to other) and material return note(records any surplus inventory left after production process)