ALPHA COLLECTIONS

ASSIGNMENT : 1

TOPIC: PURCHASING SYSTEM OF

ALPHA COLLECTION

SUBMITTED BY: SUBMITTED TO:

Aakriti Sharma: 02 MBA 10

Priyam Goyal: 25 MBA 10 PROF. B.C. SHARMA

Surbhi Sachdev: 36 MBA 10

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INDEX

1.1 INTRODUCTION

1.2 OBJECTIVES OF PURCHASING

1.3 PURCHASING SYSTEM OF “ALPHA COLLECTIONS”

1.4 SOFTWARE USED FOR MANAGING INVENTORY AND PURCHASING SYSTEM

1.5 PURCHASING PROCESS

1.6 PURCHASING METHODOLOGIES

1.7 SUPPLY BASE

1.8 OTHER SUPPLIERS

1.9 PURCHASING PROBLEMS

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1.1 INTRODUCTION

Purchasing is the of the core activities of the economy. All types of organizations whether
merchandising manufacturing or even non profit are continuously engaged in purchasing certain
goods or services.
In business world purchasing is broadly classified in to two groups:

1) Mercantile purchasing
“Mercantile purchasing” refers to commercial activities wherein buying of items is intended to
their resale at a profit.
2) Industrial purchasing
“Industrial purchasing” involves the procurement of items for the purpose of consumption or
conversion”

1.2 OBJECTIVES OF PURCHASING:

• To avail materials, supplies and equipment at the minimum possible costs.

• To insure the continuous flow of material.
• To increase asset turnover.
• To develop the alternate source of supply
• To optimize customer satisfaction.
• To establish and maintain the good relation with the suppliers.
• To achieve maximum integration with other departments of the company such as
production department, engineering department, marketing department, finance
department.
• To train and develop the personnel.
• Efficient record keeping and management recording.

1.3 PURCHASING SYSTEM OF “ALPHA COLLECTIONS”

Departmental store

CUSTOMER PROFILE
Nature of business Trading
Location Basant Nagar, Janipur
Proprietor Mr.Rakesh Sharma
Employees 18-20
Product Cosmetics, convenience goods ,crockery,
stationary, gift items

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1.4 SOFTWARE USED FOR MANAGING INVENTORY AND

PURCHASING SYSTEM:

Busy win 3.6

1.5 PURCHASING PROCESS:

1) PURCHASING ORDER:

It varies according to the company they deal with:

a) In case of Big Brands like HUL, P&G, Coke, Red Label:

Company have set different distributor according to the area. The distributor themselves come
and take order. They generally visit 2 to 3 times in a week .In case of some products they have
fixed quantity per week and company personnel themselves come and check whether products
are in sufficient quantity or not.

b) In case of pulses, rice and kiryana items SELF PURCHASE is practiced i.e. order is mostly
placed on phone.

2) REQUEST FOR QUOTATION:

Ideally, after identifying supplier, buyer issues request for quotation. But in this case supplier in
order to make additional profit don’t provide the actual price quotations, instead they manipulate
prices and charge higher price than quoted by the company. That many times cause losses to the
business.

3) PURCHASE DELIEVERY:

After order has been placed, the order is delivered by respective supplier and invoice is received.

4) PURCHASE INSPECTION:

In this three things are checked

a) Quantity-whether quantity received and ordered for particular product is same
b) Expiry-whether the products are expired
c) MRP-whether the MRP of the product ordered and received is same.

5) PURCHASE RETURN

This is needed if the product is damaged or expired or is in more quantity than demanded or
when we already have enough stock of material received.
For purchase ‘credit note’ is prepared.

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6) FEEDING DATA IN SOFTWARE/PURCHASE VOUCHER

After inspection purchase received is feeded in BUSY WIN. This involves following steps:

a) Each product head is prepared.

b) Barcode are feeded under each head.
c) It is checked whether barcode are same or company have changed barcode for particular
product.

After preparing purchased vouchers products are ready for sale.

1.6 PURCHASING METHODOLOGIES

They mainly follow three purchasing mythologies

A) CASH PURCHASING
Small value items like biscuits, stationary, toothbrushes etc whose total bill is less than Rs20000
are purchased on cash i.e. without following long purchasing procedure.

B) CREDIT PURCHASING
This method is generally used for items such as rice pulses etc whose total bill is more than Rs
20000. For that items payment is generally done by cheque between 7 to 30 days of purchase.

C) PURCHASING FROM SINGLE SOURCE

In order to avoid chaos of having more than one supplier for one product. Business generally
follow purchasing from single source this saves their time, confusion and cost also.

1.7 SUPPLY BASE

Supply base is a term generally used for suppliers that firm use to acquire their material and
supplies.
ALPHA COLLECTION has a supply base of approximately 435.
For Big brands like Coke, HUL, Pepsi, P&G etc companies have set distributors’ area wise .So,
the store get supplies from distributor who fall in their area.

For ex:-

COMPANY SUPPLIER OFFICE

PandG A.M agency Bahu plaza
Amul Gayatri enterprise Talab tillo
HUL Kanishka enterprise Sarwal

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For local brands store keeps changing supplier or select supplier on the basis of service. This
include:
a) Prices offered
b) Delivery timing
c) Supplier relations

1.7.1 Ex:- For “TOPS JAM”

SUPPLIER TILL
Jai Bawa lal enterprise 5-5-2010
J.R Traders 26-7-2010
Swastik enterprise 24-1-2011

1.7.2 For “JOY CREAM”

SUPPLIER TILL
Vardaman enterprise 28-10-2010
S.R agencies 16-3-2011

For Suji and maida

Supplier: RamKaur Behari Lal

1.8 Other supplier of store

A.H Enterprises
A.M.Agencies
Aggarwal Agencies
Amit Enterprises
Arihant Enterprises
Devki Nandan & Bros.
Dharminder Enterprises
Durga Sales
Food Sales Corporation
Gujral Enterprises
J.S.Traders(Crystal)
Jai Bawa Enterprises
Kailash Industries
Kanishka Enterprises
Krishna Food Products
Max International
Monarch Marketing
Ninawat & Ninawat Traders
Nipun Trading Company
Nitin Trading Company
P.S. Associates
Paras Enterprises
Prabh Dayal Krishan Chander

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R.D .Agencies
Raman Traders
RJM Enterprises
S.G.Enterprises
Samiya Enterprises
Santosh Traders
Sarang Enterprises
Sarveshwar Overseas
Satisar Enterprises
Sham General Store
Shashank Agencies
Shiva Enterprises
Shree Guru Dev Enterprises
Shree Mahavir Traders
Swastik Enterprises(Catch)
T.R.Gupta &Sons
Tee Cee Agencies
Vardhman Plastic

1.9 PURCHASING PROBLEMS

A) Major problem faced in purchasing by store is that many time distributor don’t provide
right price quotations quoted by company in order to make profit. Than, it become
difficult for store to have right prices and have to suffer loss.
Ex:
Supplier Product Company Distributor MRP Loss beared by store
Quoted Quoted
price price
S.R.agency Cosmoactive 11.53 15.83 20 4.30
Shaving
cream

B) It is difficult and cause lot of confusion to store to return the purchase after expiry or
damage. If there is difference between company quoted price and distributor quoted
price. Like happened in case of cosmoactive shaving cream.

C) When order is in bulk distributor always tries to give expired product along with other.

D) In case of bulk order, in order to increase bill amount company tries to add unwanted
products alongwith other. For ex: If order was placed for Rs.60 pack company will put
some Rs 100 packs along with that.

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E) Another problem faced in case of bulk order is that company distributor add some pieces
of old MRP products along with one ordered for. For ex: Along with four pieces of soap
cakes of Rs 10 they will add two pieces of soapcakes of same brand but with old MRP.

F) Another problem faced by store is that companies oftenly change the product barcode and
it become time consuming for store manager to change barcode every time purchase are
done.