Material Requisition – What is?, Meaning, Procedure and Problems

Material Appropriation– Meaning, Treatment and Issues. Significance of Product Appropriation, Everything you need to know about Material Appropriation. Product appropriation may appear like a petty matter, however in reality it plays a vital function in manufacturing process. Material Requisition is very important role in production scheduling. This post will explain all about product requisition.

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What is Product Requisition?

Material requisition refers to the document which authorizes the material to be drawn from storage or storage facility for further manufacturing.

Who ask for material?

Normally Production manager will fill out the Product Requisition Form and will submit the exact same to the Storage department, which will in turn concern needed product to the production.

Why product requisition is filled in?

  • For charging the expense of product so requisitioned to the work in process or task in process.
  • For buying the material which have crossed reorder level.

    Procedure for product requisition

    Enquiry for material

    The production manager will devise the production schedule which will state the product required (in quantity) for a specific established output (in quantity). Production supervisor will complete the Product Requisition Type and submit the same to the Storage facility.

    Acquiring department

    After receiving the material appropriation kind, the purchase supervisor will look into existing inventory.He will send out a copy of material-requisition to Accounts Department for accounting and all at once will send a copy to Stores/ storage facility department.In case, the inventory has actually come down to reorder level point, he will send purchase order to supplier.

    Stores department

    The shops department will check on existing inventory and will release the requisite material with delivery note. The production department will provide Goods got note to shops department/ warehouse.

    Problems came across and its services in material appropriation process

    Where the product are bought at high rates

    The purchase manager may have insider relation with the supplier.This will be done for prohibited consideration from such supplier who will price quote greater prices.The purchase supervisor will get commission for authorizing and acquiring the product.

    This can be resolved by resorting to standard costing approach, which will present the differences which will be easier to evaluate and identify the weak points.

    Fake purchases

    The purchase supervisor can try and install fictitious purchases.This can be solved by putting up physical controls at each phase of purchase.

    Less amount gotten on purchasing

    The clerk may tape-record less variety of product in absence of any proper check at this stage. Such embezzled material might be sold individually or can be used for individual purposes.This situation can be fixed by setting physical monitoring at the inwards gate.

    Stock loss

    The regular loss recording might be a matter of issue. It is typically predetermined.Regular physical stock taking could prevent any unwarranted losses which cant be termed as normal losses.

    Losses at the stage after product is provided to production

    This can’t be determined as the material remains in transit and any unusual losses due to theft or misplacement cant be found and reported.This could lead to short receipt of material at production stage.This might be easily dealt with by preserving standard usage allowance and will provide variances which will be much easier to identified.

    CONCLUSION

    Materials-requisition is the crucial stage in supply chain.This could result in unnecessary wastage or losses or expense usage, which will pump up the WIP expenses which will in turn increase the final expense of production.

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