1. Copyright © Texas Education Agency, 2012. All rights reserved. Procurement and Inventory Control Statistics & Risk Management 1

2. Copyright © 2012 Texas Education Agency. All rights reserved. “Copyright and Terms of Service Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Call TEA Copyrights with any questions you have.

3. Copyright © Texas Education Agency, 2012. All rights reserved. Purchasing Overview Materials and products used for Product Production or Resale. Materials and products used for Product Production or Resale. Supplies needed for daily operations. Supplies needed for daily operations. 3

4. Copyright © Texas Education Agency, 2012. All rights reserved. Vendor Selection Competitive Pricing & Terms Competitive Pricing & Terms Product/Service Quality Product/Service Quality Performance Criteria Performance Criteria Order Placement Methodologies Order Placement Methodologies Location Location – Shipping Issues – Political Issues 4

5. Copyright © Texas Education Agency, 2012. All rights reserved. Bid Processes Private Entity Process Private Entity Process – Creating RFP – Evaluating Proposals Public Entity Process Public Entity Process – Often strict laws regulating the process for both government and vendor employees. 5

6. Copyright © Texas Education Agency, 2012. All rights reserved. Order Processing Manual Manual – Vender – Customer Managed Automated Automated Maintain Stock Levels Maintain Stock Levels Just-in-time Just-in-time 6

7. Copyright © Texas Education Agency, 2012. All rights reserved. Inventory Management Physical Inventory Physical Inventory Book Inventory Book Inventory Reconciliation Process Reconciliation Process 7

8. Copyright © Texas Education Agency, 2012. All rights reserved. Inventory Evaluation Itemized (ID or Serial Numbers) Itemized (ID or Serial Numbers) LIFO (Last in First Out) LIFO (Last in First Out) FIFO (First In First Out) FIFO (First In First Out) RDI (Retail Dollar Inventory) RDI (Retail Dollar Inventory) 8

9. Copyright © Texas Education Agency, 2012. All rights reserved. Inventory Control Minimum Stock Level Minimum Stock Level Minimum Order Size Minimum Order Size Returns Returns Shrinkage - Obsolescence Shrinkage - Obsolescence 9

10. Copyright © Texas Education Agency, 2012. All rights reserved. Inventory Turnover How many Times a Year. How many Times a Year. How many Days until Turned Over. How many Days until Turned Over. Ratios Ratios Why is Turnover Important? 10

11. Copyright © Texas Education Agency, 2012. All rights reserved. Asset Acquisition Real Cost of Acquisition Real Cost of Acquisition Payback Period Payback Period Return on Investment Return on Investment Net Present Value Net Present Value 11

12. Copyright © Texas Education Agency, 2012. All rights reserved. Human Resource Application-Resume Application-Resume Interview(s): Phone/Onsite Interview(s): Phone/Onsite Testing Testing Background Check Background Check Selection Selection 12