MANAGER DIRECTIVE

MD-1 / January 4, 2008

Revised March 31, 2008

To: Flagship FastLube Management Team

Subject:PURCHASE ORDER PROCEDURES

In order to control cost and to ensure that all purchases for the company are necessary and authorized, a Purchase Order (PO) control system will be used for all Flagship purchases. Without positive control it is impossible to track purchases, manage inventory and to control expenditures. The following will be done when ever purchasing an item:

PURCHASES FOR A SPECIFIC VEHICLE

  1. Decide what is needed to complete the service for that particular vehicle.
  2. Call order in to part store/supplier.
  3. Give the vendor a PO #, which will be the license plate # of the vehicle for which the part is being ordered.
  4. Receive the part from the vendor, being sure that the PO# is annotated on the invoice.
  5. If the PO# is not on the invoice, write the PO# in a visible area.
  6. Staple the part store invoice to the Fastlube invoice.
  7. Write the Fastlube invoice # on the part store invoice.
  8. Send the part invoice with the Fastlube invoice to the office with the daily paperwork.

PURCHASES FOR STORE STOCK

  1. Decide what is needed in the store.
  2. Write the information you will need to make the order into the PO Log Book.
  3. Date
  4. Vendor
  5. Item Description
  6. Quantity
  7. Place the order with the vendor, giving them the assigned PO# from the log book.
  8. Receive the order, being sure all items ordered were received. Be sure the PO# is annotated on the invoice.
  9. If the PO# is not on the invoice, write the PO# in a visible area.
  10. Complete the PO Log Book with the information you just received.
  11. Invoice #
  12. Amount of invoice
  13. Manager’s signature
  14. Send the invoice to the corporate office with the daily paperwork.

Ricky E. Price, President

Fastlube Inc.

961 Center Street, Wahiawa, Hawaii 96786  Office (808) 621-0899  Fax (808) 621-1617