Inventory

• Economie
• Tertiary Education

Question

What is the normal days of credit?

Chapter 15

Section 1: Purchase Management,

Pages 354-360

Objectives

Describe the factors that affect the price of a purchasing

Analyze  the different dating terms

Prepare the purchase orders

Facts

Contact several vendors to find the best price. When orders are

large, prices may be negotiable. However, the lowest price is not

always the right price.

Why is the lowest price not considered as the best price?

What are the factors that affect the price?

___________ depends on
where you are in the channel of distribution.

1. Price
2. Cash
3. Discounts
4. Quality

A trade discount is a discount from the list price of an item

allowed by a manufacturer to wholesalers and merchants

A quantity discount is
a discount that a vendor gives to a buyer who places large orders.

Cash discount is an amount deducted from the selling price for payment

within a specified time period, such as 10 days

Dating Terms

Advance Dating

Extra dating

End of Month dating

Receipt of goods dating

These terms change the date
from which the terms take effect to the end of the month

1. Extra dating
2. Advance dating
3. Receipt of goods dating
4. End of month dating

This occurs when manufacturers give a date
other than the invoice date for the terms to take effect

1. Receipt of goods dating
2. Extra dating
3. Advance dating
4. End of month dating

Find the difference between Receipt of goods dating and extra dating .

.Purchase orders

The purchase order includes the quantity, style, and number. It also includes the unit price of each item purchased along with extensions. Extensions are the result of multiplying the number of units by the cost per unit. Suppose you had several items on the same purchase

order. You would total all of the extensions and enter them at the bottom of the Total column. Other entries on the purchase order might include shipping and delivery instructions

Give the picture of a purchase order and explain it.

Explain here.

Decide what you should do if you find something wrong with a shipment
or an invoice.

Does purchase management end after you place a purchase order?