OrderingOrdering

• Acquisition of products externally/ Acquisition of products externally/ internallyinternally

• Local Purchase Orders (LPO)Local Purchase Orders (LPO)

• The Institution recommends that you The Institution recommends that you use a Local Purchase Order when use a Local Purchase Order when ordering items for use by various ordering items for use by various departments.departments.

• Requisition noteRequisition note

• To use a LPOTo use a LPOTo get a Local Purchase Order, a To get a Local Purchase Order, a Purchase Requisition Form/Note is Purchase Requisition Form/Note is completed and forward Procurement completed and forward Procurement Department which then generates Department which then generates the Local Purchase Order and sends the Local Purchase Order and sends it to the supplier, either electronically it to the supplier, either electronically or otherwise.or otherwise.

Documents in TradeDocuments in Trade

Local Purchase OrderLocal Purchase Order

InvoiceInvoice

Way BillWay Bill

Reasons for use of LPOReasons for use of LPO

There are three reasons for use of Purchase There are three reasons for use of Purchase Orders:Orders:

• To control acquisition of goods and services To control acquisition of goods and services when price is a primary consideration.when price is a primary consideration.

• To create an "encumbrance" in the general To create an "encumbrance" in the general ledger of accounts in order to control ledger of accounts in order to control budgets.budgets.

• By using a Purchase Order, everyone By using a Purchase Order, everyone involved in the purchase cycle can track the involved in the purchase cycle can track the order by referring to the same number.order by referring to the same number.

TransportationTransportation

• The movement of people, animals The movement of people, animals and goods from one location to and goods from one location to another.another.

• Modes of transport include air, rail, Modes of transport include air, rail, road, water, cable, pipeline and road, water, cable, pipeline and space. Transport is important as it space. Transport is important as it enables trade between people, which enables trade between people, which is essential for the development of is essential for the development of civilizations.civilizations.

InventoryInventory

• InventoryInventory also called also called stockstock refers refers to the goods and materials that a to the goods and materials that a business holds for purposes of resalebusiness holds for purposes of resale

• Reasons for keeping stockReasons for keeping stock TimeTimeUncertaintyUncertaintyEconomies of ScaleEconomies of ScaleAppreciation in ValueAppreciation in Value

Distribution warehouseDistribution warehouse• A building or place where items for A building or place where items for

distribution are stored. It serves as distribution are stored. It serves as storage for products from the storage for products from the manufacturer to the distributor manufacturer to the distributor before these products are distributed before these products are distributed to various retails for customers to various retails for customers acquisition.acquisition.

PricePrice• This the quantity of payment or This the quantity of payment or

compensation given by a party to compensation given by a party to another in return for goods or another in return for goods or services. Price is not cost. Price is services. Price is not cost. Price is commonly mistaken for cost Costas commonly mistaken for cost Costas are concern with the producer’s are concern with the producer’s investment in production. investment in production.

Who uses a distribution Who uses a distribution warehouse?warehouse?• ManufacturersManufacturers

• Third party distributorsThird party distributors

• Retail stores. Retail stores.

Benefits of a Distribution Benefits of a Distribution WarehouseWarehouse

• Money-savingsMoney-savings

• Peace of mindPeace of mind

• Money-savings Money-savings

PricingPricing

• This is the process of determining This is the process of determining what a company will get in exchange what a company will get in exchange for its products. It can also be viewed for its products. It can also be viewed as a method adopted by an as a method adopted by an organization to determine its selling organization to determine its selling price. Generally, it depends on the price. Generally, it depends on the company’s average costs and company’s average costs and customer’s perceived value of the customer’s perceived value of the product in comparison with that of product in comparison with that of the competitor or competing product.the competitor or competing product.

Financial Management in Financial Management in PublishingPublishing• In the publishing industry like other In the publishing industry like other

industries finances are key hence the industries finances are key hence the need to plan properly. Finances allow for need to plan properly. Finances allow for continuity in the production and sale of continuity in the production and sale of the book. It addresses the issues of the book. It addresses the issues of expenses and incomeexpenses and income

• Expenses will guide in the fixing of Expenses will guide in the fixing of prices to a product. Incomes enable prices to a product. Incomes enable publishers pay for all expenses i.e. bills, publishers pay for all expenses i.e. bills, salaries, royalties etc. to enable salaries, royalties etc. to enable continuity in the industry.continuity in the industry.

Guidelines in fixing priceGuidelines in fixing price

• Organizational and marketing Organizational and marketing objectivesobjectives

• Elements of the marketing mixElements of the marketing mix

• Cost of the product Cost of the product

• Customer perceptionCustomer perception

• Legal and Regulatory IssuesLegal and Regulatory Issues

Pricing StrategyPricing Strategy

• Publishing houses will set their pricing strategy. Publishing houses will set their pricing strategy. The word strategic is used in various contexts to The word strategic is used in various contexts to imply different things. Here, it is used to mean imply different things. Here, it is used to mean the coordination of otherwise independent the coordination of otherwise independent activities to achieve common objective. For activities to achieve common objective. For strategic pricing, the objective is profitability. strategic pricing, the objective is profitability. Achieving exceptional profitability requires Achieving exceptional profitability requires managing much more than just the price levels. managing much more than just the price levels. It requires ensuring that products and services It requires ensuring that products and services include just those features the customer is include just those features the customer is willing to pay for, without those that willing to pay for, without those that unnecessarily push up the cost by more than unnecessarily push up the cost by more than they add to the value to it. Pricing strategy is they add to the value to it. Pricing strategy is brought in construction accountsbrought in construction accounts

Construction AccountsConstruction Accounts

• Balance SheetsBalance Sheets

• Profit and Loss AccountsProfit and Loss Accounts

• Cash FlowCash Flow

Balance SheetBalance Sheet

Profit and Loss Profit and Loss AccountAccount

Cash FlowCash Flow

Issues in BooktradeIssues in Booktrade