Centralised purchasing Vs Decentralised purchasing

 CENTRALISED PURCHASING 

  Centralised purchasing is the system of purchasing, where all purchases are made through one department or one office or one person specialised in purchasing. 

Advantages of centralised purchasing 

1.More trade discount 

2.Reduced transportation cost

3.Maintenance of quality of materials 

4.Avoidance of unnecessary purchase.

5.Less capital investment. 

6.Avoidance of obsolescence. 

Disadvantages of Centralised purchasing 

1.High cost of maintaining the department. 

2.Losing the benefit of local purchasing. 

3.Delay in procurement. 

4.Not suitable for all concerns.

5.Chance of wrong purchase.

DECENTRALISED PURCHASING 

           Decentralised purchasing is a system of purchasing, where the purchases are made by the respective production departments to meet their material requirements. 

Advantages of  Decentralised purchasing 

1.Low cost of purchasing 

2.Easy availability of materials. 

3.less capital investment 

4.low material handling charges

5.Issue of required quality materials. 

Disadvantages of Decentralised purchasing 

1.Less trade discount. 

2.High transportation cost

3.Unnecessary purchase.

4.More capital investment. 

5.Inefficient purchase personnel.