What Is a Procurement Cycle?
The procurement cycle refers to the entire cycle time when the purchaser decides to place an order and places the order-supplier confirmation-order processing-production planning-raw material procurement (sometimes)-quality inspection-shipping (sometimes third-party logistics). Simply put, it is the number of days between regular purchases.
purchasing cycle
Right!
- Chinese name
- purchasing cycle
- Definition
- Regular number of days between purchases
- Calculation method 1
- Empirical quantitative method
- Calculation method 2
- Point of purchase
- The procurement cycle refers to the entire cycle time when the purchaser decides to place an order and places the order-supplier confirmation-order processing-production planning-raw material procurement (sometimes)-quality inspection-shipping (sometimes third-party logistics). Simply put, it is the number of days between regular purchases.
- The purchase cycle is when the buyer decides to place an order and places an order-
Purchasing cycle empirical quantitative method
- Purchase cycle = days in transit + average storage days + sales preparation days + motor insurance days
- The average number of days of purchase in a certain business cycle = (the quantity of each purchase of the product × the number of days between each purchase) / the total amount of purchases during the period
Procurement cycle
- That is, when the commodity inventory drops to a certain limit, the method of immediate purchase
- When supply and sales are relatively stable: purchasing point = average daily sales amount × average purchase interval days
- When supply and sales are unstable: purchase point = (average daily sales amount × average purchase interval days) ± safe storage. (Supply less than demand adds up, supply exceeds demand minus).