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1.what is the process of purchasing materials in
manufacturing company ?
2.What is the difference b/w invoice and Purchase order?
3.How to select,to purchase the best product/material in
manufacturing industry?
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Answer Posted / randy
1. Simply put, using the ABC Class coding for item being
manufactured and/or assembled. Your question is very broad
and hard to answer since you are asking a question that
involves to many departments. But generally speaking, when
it comes to cost, ship dates, quantities ordered, the ABC
rule is best.
2. A "Purchase Order" is a legal and binding contract
between a Manufacturer and Supplier that stipulates the item
ordered, quantity of item, ship dates, and cost of item that
the Supplier agrees to supply the Manufacturer.
A "Invoice" is what the Supplier sends to the Manufacturer
after or with the items that are described in a Purchase
Order. The Invoice contains the item description, quantity
shipped, and cost of said item and is to be paid by the
Manufacturer according to the terms agreed upon either ahead
of time or as described in the Purchase Order or as noted on
the Invoice. Generally, the terms are Net 30 days.
3. All items to be purchased have a blueprint or a listing
of what this item is made of and/or a Manufacturer part
number. If it is to be a manufactured part made from a
blueprint, the purchasing agent has the responsibility to
send out for quote (3 vendor min.) and receive from the
Vendor, a list of prices based on quantity ordered. The best
product and material come from reputable and established
companies that deal with this type of product. Larger
companies have better price since they deal with larger
volumes of raw material and better machining equipment and
more experienced personnel.
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