This document discusses the purchasing process and best practices for procurement. It defines purchasing as getting the right products at the right time for the right price, quality, and quantity. It outlines ethics in purchasing and the 5 R's - getting the right quality, quantity, price, time, and source. It also discusses purchase orders, different types of markets, discounts vs rebates, and purchasing policies around approvals, budgeting, bidding, and record keeping. The ordering system uses fixed intervals for groceries, soft drinks, and perishables.

1. Presented by:
PROF. MARIANNE T. EVANGELISTA, MSHRM

2. METHOD OF EXECUTION
PART 01
PURCHASING

3. PURCHASING
• Also known as
“Procurement or
Buying”.
• It is the process of
getting the right
product into a
facility and to
consumer at the
right time in a form
that meets pre-
established
standards, quantity,
quality and price.

4. ETHICS IN PURCHASING
• Demands ,
integrity,
maturity,
bargaining
skills and
maintenance
of a high
standard
ethics.

5. 5 R’S IN PURCHASING
1. Right Quality – all purchased items must
meet the desired specifications must be
described in detail in the purchase request
and/or market list. This information
include:
- Quality
- Brand Name
- Size and Weight
2. Right Quantity – purchase must be enough
for immediate consumption not unless there
is a need to purchase extra stocks like when
there is anticipated increase of prices or
food shortages.

6. 5 R’S IN PURCHASING
2. Right Price – all items must be purchased
at the lowest possible price but make sure
that it still meets the required
specification.
3. Right Time – timely delivery is a must,
buying products in season can be considered
if they are cheaper and of better quality
than when they are out of season.
4. Right Source – all items will be purchased
to direct producers and trusted suppliers
to ensure good quality in a lower price. A
right source can give you good discounts
and rebates.

7. DIFFERENCE BETWEEN
DISCOUNT AND REBATE
• DISCOUNT – an automatic deduction or
reduction in the amount of cost per
product from your direct supplier.
• REBATE – Refund or a bigger discount
of part of an amount paid but with
terms and conditions.

8. 3 TYPES OF MARKET
• PRIMARY MARKET –
Basic source of
supplies
• SECONDARY
MARKET – Products
accepted from
Primary Market
• LOCAL MARKET –
Place where we
normally buy
products (Wet and
Dry Market)

9. PURCHASE ORDER
• A purchase order (PO) is
a commercial document issued
by a buyer to a seller,
indicating types, quantities,
and agreed prices for products
or services the seller will
provide to the buyer.
• Sending a purchase order to a
supplier constitutes a legal
offer to buy products or
services.
• Acceptance of a purchase
order by a seller usually
forms a contract between the
buyer and seller, so no
contract exists until the
purchase order is accepted.
• It is used to control the
purchasing of products and
services from external
suppliers

10. PURCHASING POLICIES:
• In order to control or avoid untimely, wasteful and
unreasonable purchases that drain company’s
capital here are the ff. purchasing policies:
1. No purchases can take place without duly
approved purchase request for non food items and
market or grocery list for perishable items. Said
request will come from the department head,
subject to the review and approval of Purchasing
Manager or whoever is in command of purchasing
transactions, based on approved budget.
2. No unbudgeted purchases will be allowed unless
fully justified. The budget is usually based on the
sales forecast. When the actual sales exceed the
forecast, the Purchasing office may consider
additional purchases.

11. PURCHASING POLICIES:
3. Purchaser shall resort to canvassing of
prices before making orders. There should be at
least 3 quotations from different suppliers.
4. Approval of purchases and awarding of bids
shall be done by the purchasing manager or
whoever is in charge after reviewing the price
quotations and the quality of the merchandise.
5. A purchase order shall be prepared upon
awarding of bid and shall be issued to the
winning bidder. PO shall contain all
specification such as: description of the items,
weight/size, yield, color etc.

12. PURCHASING POLICIES:
6. As a general practice, all purchases should
be pre planned . Emergency or rush order should
be minimized if not, totally eliminated.
7. Purchasing office must keep a file suppliers
information sheet for future reference.
8. All requests for capital expenditure such as:
heavy equipment, fixed furniture and other
related items are to be processed directly by
the Executive office, subject to Executive
approval of the owner or his duly authorized
representative.

13. ORDERING SYSTEM
• FIXED INTERVAL SYSTEM is one which
the interval between orders are fixed
but the quantity of order varies. This
type will be applied to the following:
1. GROCERIES – Every Week
2. SOFT DRINKS / JUICES – Every Week
3. PERISHABLES - Everyday