1. A proposal of PURCHASING POLICY AND PROCEDURES ---2012
SUBJECT : MATERIALS –PURCHASING -POLICY AND PROCEDURES
POLICY OBJECTIVES-/STATEMENT--------
FOCUS –MIKHEAL hotel, a five HOTEL , , has a material s department
controlling the inflow of material to the hotel ,the suppliers are identified ,
purchase orders –market list are purchased from various suppliers stored in
the general stores and kitchen stores,at
Although there is a sustained level of material flow and the accounting
responsibilities are quite reasonable , however it was felt by the top management
that the materials function is revamped , more rational policy and procedures
material are set up for an effective mechanism of supply chain operations,
which would govern a large scale warehousing facility , optimizing costs on
added value inventory in the general stores and kitchen , mitigating supplier
hold on the daily procurements due to lack and adequate storage space, and
effective material procurement management system which warrants the
supplier to dictate term on- OUR PURCHASES –the resultant factor of last
minute rush order on the suppliers with a lack of sequential planning on effective
quality procurement of material cost high prices , the material management is
not in a position to scheme the market to the company’s advantage
1. The cost journal equation at present is as follows
Opening stock + plus purchases for the month ---less Closing stock
=consumption
2. However the actual purchase journal should read as follows
Opening Stock + Add Purchases ---less consumption =Closing stock
The first is journal will not measure and analyze accuracies as it is a
consumption valuation by default , however the second journal is a very highly
accurate journal analyzing purchase variations and reconciliations
The enforcement of the second journal is the accuracy measures entrusted to the
cost controller who analyze daily net consumptions to net revenue , and these net
consumptions after adjustments are journalized to arrive at highly accurate cost
figures .
Thus to enable the objectives of the company , for a sustained level of material
inflow at optimum pricing out flow of material from stores on FIFO Method
and ABC analysis of inventory with EOQs , supplemented with material
procedures such as Material indenting system from stores and department ,
purchase order system material receivable –Goods Received Notes –material
issue notes from stores to user department, inventory valuations , consumption
analysis

2. Are all factors which influence positive for an effective supply chain
management system
.
The new material and procurement policy will have the following Aspects in
the material procurement planning
The Material
The purchaser would purchase for both the Hotels s the material for its daily
consumption and stock, the objective would be to purchase the high quality product
at reasonable rates, The purchaser would source the material food, beverages,
engineering FFE, capital and project items for its use from various suppliers who
have a good Reputation in the market and ensure that spurious, duplicate and expiry
date good s , are not purchased from the market, for items not available in the local
market the Same would be purchased from abroad / imported, The management
would make a list of the product specifications for all its material and for easier
access of costing norms ,the material would be segmented and coded as follows
Category –food –engineering –HK-rest linen-room linen –Printing and stationery
Classification –food –groceries –meat fish poultry –tinned items etc
Engineering –plumbing –critical spares,Beverages etc
Item –food –MFP—meat –mutton beef etc, fish-fish –crabs etc, poultry-chicken
turkey—eggs etc ,thus analyzing material specifications and supply chain
management are proactive factors in ensuring and regulating flow of material for
input conversion and out put from raw material , engineering consumables like nuts
bolts Screws and capital purchases like kitchen equipment FFE, SOE , Linen,
Uniforms , laundry equipment , compressors , generators , cooling towers, Music and
entertainment equipments , guest room equipment , office equipments ,etc do have
material specifications .value analysis and waste management are important
Aspect of material definitions and procurements.
Sourcing from authentic suppliers , the identifying supplier analysis would be from
sourcing from existing suppliers in the market , developing new vendors , MAKE or
BUY decisions Imports of raw material unavailable in the country The purchaser
would source the material food, beverages, engineering FFE, capital and project
items for its use from various suppliers who have a good Reputation in the market,
Highly perishable items are procured from Regulated markets –Remember that our
present purchasing is 40% local and 60 Foreign
Adequate warehousing
The essential aspect of supply chain is to ensure adequate
ware housing space fixed with slotted angles, storekeeping
with stores ledgers ,and storekeeper , storekeeping
procedures like bin cards with FIFO location codes ,ABC
analysis . Bob carts, Trolleys can be used for running