9.4.1. Puchases & Materials
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This subsection could be important for production and distribution businesses.
Identify key services, materials or goods to be purchased for either production or resale. Outline plans for sourcing them. For key items, indicate specifications, prices, taxes/duties, purchasing arrangements and credit terms. Discuss likely future price trends.
For distribution businesses (wholesale and retail), describe the range of goods to be purchased, explain about shelf life and inventory, and discuss mark up percentages used to help arrive at selling prices.
In the case of production businesses (manufacturing and service businesses with significant expenditure on bought-in items), explain the composition of material (or bought-in components or services) within finished products (i.e. the bill of materials) and discuss such matters as procurement, material utilization, inventories and unit material costs.
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