Horti-Business Management (2+0)

1. Material (goods) planning and control

• Decisions to be taken in this are:
a) Amount of materials needed for output desired
b) Amount of inventory and its storage and recording
c) Vendor relations
d) Quality material and price per unit
e) Quantity and time of order
f) Methods of receiving and transporting
g) Handling of defective materials and stock

• Policies and procedures should be established so that most of these decisions become routine in nature. When exceptions occur, the concerned authority should correct them.
• Materials are a form of investment and unit they are sold and produce revenue, the money cannot be used for other income producing purposes. Consequently, the manager wants to buy (the materials) in small quantities and sell the output rapidly in order to obtain income. But, if quantities are too small, the income producing opportunities may be lost and customers may be missed. Also, purchasing in small quantities usually results in higher prices. The losses due to theft should be kept minimum. While increasing controls may reduce cost from losses, it also increases the controlling cost. The problem is to find the balance between these two costs.