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When demonstrating this policy success of the company
When you get a supplier provides lower costs
When there is a competitive advantage in that
Be better for the company to follow a consistent policy
Forward Buying is more than a future commitment as it involves physical act of buying which may or may not include staggered deliveries at future dates. This is done keeping in view various factors such as:
Forward Buying : Forward Buying as the name suggests is the system under which buying is done with longer term in perspective.
It is not meant for meeting the present consumption requirement. It is rather a commitment on part of both the buyer and the seller , normally for a period of one year.
Depending upon the availability of the item, the financial policies, the economic order quantity, the quantitative discounts, and the staggered delivery, the future commitment is decided.
A few organisations do “hedge”, particularly in the commodity market by selling or buying contracts.
Forward buying helps a firm in booking capacity of a supplier and thus often results into a safeguard against a competitor acquiring his capacity. It is usually done for Raw materials but is not limited to it. Now a days , with competition becoming globalised such an arrangement is a win-win situation for both , the buyer and the supplier.
It is a situation when sales channels (wholesalers, distributors, retailers...) buy huge quantities of a product in the promotion period for a low price and stock it until after the promotion period.
I think, when they have big warehouses, great deals from suppliers, great channels to sell, etc...
Forward buying in other words is buying for future, when company expects a price rise or increase in demand, they opts for forward buying.
There are many factors which encourages forward buying.
when they reach by doing that the maximum productivity level.
and of course the rest of answers are good
When there is enough equity.
agree with all expert answer
Forward Buying as the name suggests is the system under which buying is done with longer term in perspective.It is not meant for meeting the present consumption requirement. It is rather a commitment on part of both the buyer and the seller , normally for a period of one year. Depending upon the availability of the item, the financial policies, the economic order quantity, the quantitative discounts, and the
staggered delivery, the future commitment is decided.
A practice used by both wholesalers and retailers involving the stocking up of specific products that are offered by a particular product manufacturer at a lower price. This item may then be resold to consumer purchasers after the promotional period of the marketer is over.
