IMPORTANCE OF PURCHASING AND IT MEANING

Purchasing is the first phase of material management. Purchasing is the procurement of goods and
services from some external agencies. Includes: research and proper development for the selection of
materials and source, follow up, inspection of goods, storekeeping.

IMPORTANCE OF PURCHASING

Purchasing functions provides material to the factory without which wheels of machines cannot
move

A one perfect saving in materials cost is equivalent to a 10% increase in turnover

Purchasing manager is the custodian of his firms purchases

Increase production of ones requirement are now bought instead of being made as was the
practice in the earlier days

Purchasing can contribute to important substitution and save foreign exchange

Post war shortage

Understood as buying material of the right quality in the right quantity at the right time at the right
place from the right source.