Which Of The Following Is The Objective Of Purchasing - T-Tees - Your Answers Await, Life's Questions Unraveled

Purchasing activity is an integral and incessant activity of every business. Many flourishing organizations regard it as a key function and thus have a dedicated purchase department to take care of the purchase activities. The prime objective is to clearly justify its separate existence. Further, since purchasing is a part of the total management activities, it should ensure that its objectives are in sync with the organizational objectives. Identifying objectives assists the imaginative personnel in enhancing their efforts to attain these objectives economically and efficiently. These objectives are established by the purchasing department head in consultation with the top level of management or as per the policies set by the management.

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The primary goal of the purchasing organization is to purchase the right item or service, in the right quantity, at the right price, and at the right time. An abundance of competitors and seasoned customers demand higher quality, faster delivery, and products and services customized to their needs, at the lowest total cost. These demands are made at an even greater speed because of the influx of technology and social media into business-to-business applications. Information and data flow between supply chain members are increasing, making it challenging for organizations to continuously adapt to the ever-changing needs of the customer.

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Purchase Management History

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Globalization has forced companies to improve their internal processes, such as supply management, to remain successful. The level of competition in the marketplace expanded to include both domestic and international markets. Purchasers no longer discuss “lowest price” but share information, collaborate, and talk to their suppliers about total costs, life-cycle costs, and cost reductions. This requires a focus on process improvements instead of short-term relationships and price reductions.

Following are the objectives of purchasing:

To maintain continuity in supply
To maintain quality standards
To avoid duplication, wastage and obsolescence
To sustain organization’s competitive position
To maintain good image of the organization
To develop alternate sources of supply

To maintain continuity in supply – The purchasing function needs to ascertain that the materials, supplies and equipment are available in continuity, to avoid any disruption in production and maintain a production schedule. This also requires investments to be made in reserve inventories. The efficiency though can only be achieved if these factors are properly balanced that is dependent on experience, assessment of planned activities and activities forming part of purchasing authority.

To maintain quality standards – The purchasing function should ascertain that the purchased materials should be of desired quality such that the goods can be purchased as per specifications and quality standards are maintained.

To avoid duplication, wastage and obsolescence – The purchasing department head should possess accurate knowledge of items in hand and material requirements for a set period of time, to take informed decisions on both long range as well as short range plans. This is very important to avoid any duplication, wastage and obsolescence of the items purchased.

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