Faster procurement of materials control over

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Faster procurement of materials. Control over purchases is no longer remote. Decentralized operations are more flexible. 18.3.9.4 Disadvantages of Decentralized Purchasing Where different plants of a large organisation require quite different types of materials Where branch plants require heavy and bulky items such as oil products, fuels, paints, etc. Where purchases are to be made within the local community to promote better public relations.
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228 18.3.10 MODES OF PURCHASING MATERIALS Purchase of materials can be done by one of the following methods: 18.3.10.1 Spot Quotations In this method, the purchaser can go to the market, collect at least three quotations (for purchasing one material) from different suppliers, and based on the price and other terms and conditions take a spot decision to go for the purchase deal. Then he can pay the cash and buy the material or commodity. In this method, the vendor quoting the least price generally gets the attention of the buyer. 18.3.10.2 Floating the Limited Inquiry In this method, the purchaser sends letters to some of his known or registered vendors to supply the price and other details of the items to be purchased. After getting replies from vendors, the quotations are opened and a comparative statement is prepared. This helps the decision maker to have a glance before taking the final decision. Comparative statement is analyzed in the light of the following factors: Price of the item or material Material specifications and quality Place of delivery Delivery period Taxes, etc. Terms of payment Validity of tender Guarantee period. 18.3.10.3 Tender A tender or bid or quotation is in the form of a written letter or published document in the newspapers. The aim is to find the price for procuring some items or materials or to get a work done within the desired period within certain specified conditions. 18.3.10.4 Types of Tender The tenders may be of the following three types: Single tender: Here, the tender is invited from one reliable supplier only. Single tender is called under the following cases: proprietary items high quality items C-class items such as rulers, clips, pins, pencils, erasers, etc. Open tender: This is also called press tender because it is generally published in Newspapers, trade journals, etc. for the purchase of desired materials. It is open to everybody, any vendor can furnish the quotations. Open tender can catch the attention of a large number of vendors. A vendor is supposed to deposit an earnest money along with the tender information. This is required to ensure that the vendor does not back out from the rates quoted by them.
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229 Closed tender: It is where the contract can only be awarded to one single supplier or consortium of suppliers 18.3.11 STEPS IN ONE COMPLETE PURCHASING CYCLE These steps are: 1) Recognition of need, receipt and analysis of purchase requisition.
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