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What are the pros and cons of a centralized purchasing function?

Purchasing Administration
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Question added by Mohd Mustaqeem , Executive Secretary , SAUDI PAN KINGDOM CO
Date Posted: 2014/08/27
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Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

The pros of centralized purchasing function are:

  1. Cost-savings and standardization of the product or service purchased

  2. Bulk buying strengthens the bargaining position of the buyer

  3. It enables to develop and maintain good relations with the suppliers

 

The cons of centralized purchasing function are:

  1. Lack of control or choice by the end-user

  2. The centralized standard procedure may result in delays in receiving the materials

  3. Staff may not be expert in buying varied types of items.

 

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