Purchasing

The aims of the purchasing department are:

• to ensure the firm has the quantity and quality of goods required for efficient production
• to buy at prices as competitive as possible
• to get delivery as fast as possible to ensure stocks are available as required
• to build a good relationship with suppliers
• to ensure suppliers are prompt and reliable

There is a trade-off in purchasing. The buyer will often be able to negotiate better prices if the quantity ordered is larger, but a larger quantity of stocks may mean an opportunity cost - money tied up. There are therefore various costs from stocks.