Different  ratios  and  indexes are  following

Material  Cost Indexes

1. Material cost  index   =    
material  cost  for a product
        production cost of the product

2. Material cost/sales index =  
material cost of each product
                   sales  value

3. Material variance   index =   
 value  of material actually used    
              value of standard  material  quantity


Vendor  Rating  Index      

1. Vendor  rating index  ( Quality)  =  n
o of  lots rejected
                        no of lots received

2. Vendor rating  index  ( Delivery) =   d
elivery on schedule
                           total no of deliveries

3. Vendor rating index ( Price  )   =   
 lowest price bid
                        price bid by vendor

4. Overall  Vendor  rating  =  vendor  rating ( quality ) x f + vendor rating (
delivery)xf+vendor rating ( price ) xf   where f is a constant factor


Material  planning  Index :

1.Price   variance  index  =  
standard price- actual price                            
           standard price

2. Lead Time  Index     =   
 Average  lead time  this year
         Average lead time last year



Efficiency  Indexes

1. Manpower  strength =     
Total staff in purchase
          total company staff

Negotiation effieciency   =  
actual price paid  by the organisation
                    market  price
           
Inventory  and stores

Weeks inventory  on hand   =  
material  in stock
                Weekly  consumption

Inventory  turnover  ratio ( finished good ) =         a
nnual  sales
                                          average inventory

Inventory  turnover ( Raw material  )=       
annual  consumption  
                                 average inventory

Production loss due stock out    =     
 production loss due to unavailability
                           total scheduled production line


Stores index

Handling  cost  index    =                   
 total  handling cost                                                       
                                                      total value  of material  received and issued

Handling loss   index     =                  
total  value of losses  due to  handling
                           total value of   material recd and issued

Storage  loss index       =            v
alue of inventory  loss due to pilferage ,obsolescence
                            average value of  inventory
                       
Obsolescence index     =           v
alue of  non - moving  items in inventory
                             total inventory  value
                       
Space Utilisation index  =             a
Area  used   for storage
                        total storage area

Codification index        =            
  no of items  codified
                   total number of items

Freight                     =               
 lowest  rate bid for  freight    
                     rate  paid

Vehicle capacity utilisation  =       
 total  load shipped     
                                              capacity x no of trips



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Ratios to evaluate performance of purchasing function
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