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difference between centralized purchasing and decentralized purchasing

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked about 3 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered about 3 years ago

In centralized purchasing all purchases are made by single purchase department. In decentralized purchasing purchases are made by each production department on their own. centralized purchasing is normally used in larger organisations. decentralized purchasing is used in smaller organisations. In centralized purchase Due to bulk purchase material can be purchased at discount rate. In decentralized purchase no discount is available on purchase.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered about 3 years ago

**CENTRALIZED PURCHASING AND DECENTRALIZED PURCHASING** In centralized purchasing all purchases are made by single purchase department. In decentralized purchasing purchases are made by each production department on their own. centralized purchasing is normally used in larger organisations. decentralized purchasing is used in smaller organisations. In centralized purchase Due to bulk purchase material can be purchased at discount rate. In decentralized purchase no discount is available on purchase. In centralized purchasing overall material cost is reduced. In decentralized purchasing high material cost is observed. In centralized purchasing larger time due to lengthy procedure. In decentralized purchasing it requires less time. Thanks

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Data?1494421730 rohit awasthi answered about 3 years ago

Hi Uma Centralization If top manager make the organization’s decisions with little or no input from subordinates, then the organization is Centralized The degree to which decision making is concentrated at a single point in the organization. Decentralization When the managers and supervisors at the middle and lower levels are given considerable autonomy in decision-making, the organization is considered to be decentralized” “It assumes that those most involved with the particular product, service, or consumers know what to do and can do it more quickly if given the authority to commit resources.” Buying Decision “Purchasing is a window to the outside world.” In any industry purchase means buying of equipment, materials, tools, parts etc. required for industry. The major task of the purchasing decision related with: ---Getting the right quantity of material, ---At the required or right quality, ---At the right time, ---At the right place, ---From the right source, and ---At the right cost. Centralization Vs. Decentralization on Buying Decision The issue of centralization versus decentralization of purchase function is basically concerned with decision about the purchasing policies defining the purchasing authorities and the resultant responsibilities. When an organization has several facilities, management must decide whether to buy locally or centrally. Centralized Buying Centralized purchasing is a method of procurement of all types of materials, supplies, equipment etc. through a single department (not necessarily centrally located) under the direct control and superintendence of one responsible person. He is directly accountable to the top management for all duties falling within the broad area of purchase function. Decentralized Buying Localized /Decentralized Purchasing means that divisions or smaller areas of an organization have their own purchasing dept

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