Explain the factors to be considered when purchasing materials for an organisation.

The factors to be considered when purchasing materials for an organisation.
i) Reliability of supply sources in terms of lead time and continued supply
ii) Stock inventory system being run the organization i.e. whether Just-In-Time,
ABC System, Perpetual Inventory or periodic system
iii) Costs involved in the acquisition of the materials including any discounts on offer for bulk purchases
iv) Level of quality required for the finished products to be made from the materials
v) Storage space available to the company
vi) Materials budget/ceiling set management
vii) Workability of the materials
viii) Storage life of the materials
ix) Demand levels for the finished products
x) Levels of buffer stocks as well as re-order levels set management



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