Purchasing of Materials

What Is Meant by the Purchasing of Materials? Purchasing of materials refers to the procurement of materials for a price. It is usually handled by a specific department (e.g., purchase manager in the procurement department), particularly in large companies. A purchasing department can function effectively if: It is organized on a centralized basis Full co-operation between purchasing department an…

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Material Control

Material Control: Definition Material control is the process of systematically controlling materials over the stages of procurement, storage, and usage so as to help maintain the regular and uninterrupted flow of the materials in the production pipeline. No system of costing is complete without an effective material control system. Material control is a system that ensures the provision of the req…

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Economic Order Quantity (EOQ)

Economic Order Quantity (EOQ): Definition The economic order quantity (EOQ) is the specific total order amount for a firm’s inventory that minimizes the total cost of inventory management. That is to say, EOQ refers to the size of the order that gives the maximum economy when purchasing any material. It is the optimal standard ordering quantity. The EOQ is also commonly referred to as the economic…

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