An analysis of purchasing contributions to profitability – case study of two firms – Rokana Industry Owerri and Star Paper Mill, Aba

Description

An analysis of purchasing contributions to profitability – case study of two firms – Rokana Industry Owerri and Star Paper Mill, Aba.

Abstract

Purchasing has been one of the major important functioning activities in industries. Its existence started from the early time of life though it was not noticed until when division of labour and specialization became practicable. Efficiency of purchasing contributes much to profitability but its efficiency is determined by various factors like sourcing, determination and price and availability etc. Purchasing contribution to profitability could be traced from the purchasing of the raw materials when the right raw material is bought and delivered at the right price and time. It enhances productivity and in the short run, it contributes to the manufacturing of the right finished product thereby increasing the gross profit of the company. Manufacturing companies like the Rokana industry Owerri and star paper mill Aba need an increase in profitability of which purchasing is one of the profit-making centres. But this can only by achieved if the management will appreciate the function of purchasing and allow it to carry out its responsibilities effectively by employing efficient and skilled purchasers.