-#1.2: Purchasing Department-

-pls refer to previous post for the understanding different department and their function.
- previous post: #1.1 - R&D Department

-Purchasing Department-
- Purchasing is a vital element of strategy, so usually the most senior purchasing executive may be on the board of directors. But when raw material becomes a very important cost, the purchasing officer may work in the production function.

- Purchasing manager, officer, or executive has the main responsibilities of deciding or to obtain the best purchasing mix, which includes these important aspects: Quality, Quantity, Price, and Delivery.

- To ensure that the size and the timing of purchasing orders is of optimum level, the quantity of purchase plays a very important role in this. As such, a system of inventory control will set the optimum reorder levels to ensure the economic order quantities(EOQ) are obtained for individual inventory items. Though it is generated by computer, the Optimum Reorder Levels and the EOQ can be calculated manually as well, but I wasnt sure whether we will learn that further in our ACCA paper or not.

- While the quality of the input might affects the quality of output and also the efficiency of the production function, the price of purchasing input is of equal importance as well. The purchasing manager should always pick the best value over a period of time, considering quality, delivery, urgency of order, inventory-holding requirements and so on.

- As for the aspect of Delivery in the purchasing mix, the lead time between placing and inventory of an order is very important in inventory control and production planning. The efficiency of these also depends on how the delivery timing and method are controlled.

- Other than deciding the best purchasing mix, the purchasing manager also have the responsibilities to control: Inputs for production, inputs for administration, cost, liaison with the R&D department, management of supplier, maintenance of inventory levels, and obtaining various information for the evaluation of purchasing alternatives.

- Effective purchasing can affect profit in this three ways: It obtains the best value for money, assists in meeting quality targets for the firm's long-term marketing strategy, and it minimises the inventory-holding costs.

- Next #1.3: Production department