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Former Member

production order & purchase order

Hi

What is the difference b/w production order and purchase order can u briefly explain me about.

Thanks in advance

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4 Answers

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    Former Member
    Posted on Sep 27, 2007 at 08:54 AM

    Hi,

    Production order is a type of manufacturing order which defines work center or resource is used to manufacture a material and which material components are required. It is a request asking production to manufacture a specific quatity of a material or perform a specific service on a specific date. It is userful for production planning.

    Purchase order is a request for purchasing of specific or general material.

    The basic difference between the two is production order is used for production planning and purchase order is used for material plannning. Basically any order is used for planning purpose only. YOu can set planned amounts and can calculate variances based on the orders.

    Radha

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    Former Member
    Posted on Sep 27, 2007 at 05:38 PM

    Adding to the above, in simple words Purchase order is one which you use to purchase good for the company with vendors. This is related to MM.

    Production order is one you use internally to capture the mannufacturing costs for the products in the plant. Ths is related to PP.

    assign points if helpful

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  • Posted on Sep 27, 2007 at 07:26 PM

    If you want to manufacutre an item. you issue prodution order to your production supervisor.

    If you want to purchase an item, you issue a purchase order to the vendor.

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    Former Member
    Posted on Sep 27, 2007 at 07:46 PM

    Additional comments from the financial point of view,

    Production Order is a cost object, which we require to collect cost and post consumption and reporting etc.

    Where as Purchase Order is just a collection of information and requesting a supplier to supply a list of material, which does not have any accounting impact.

    Regards,

    Santosh

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