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Purchasing 
is 'the acquisition of material resources and business services for use by the organisation'. 
1.2.1 Importance of purchasing 
Cost
. Raw materials and subcomponents purchases are a major cost for many firms. 
Quality
. The quality of input resources affects the quality of outputs and the efficiency of the production 
function. 
Strategy.
In retailing, buying goods for resale is one of the most important activities of the business. 
Position of purchasing within the organisation 
Where purchasing is of strategic importance, the most senior purchasing executive may be on the 
board 
of directors
or, at least, report to the managing director. 
Where raw materials are an important cost, the purchasing officer may work in the 
production function
. 
In any event, the purchasing officer must 
liaise with the finance department
, especially with regard to 
payment of payables. 
The purchasing manager's responsibilities include: 
(a) 
Inputs for production
.
 
Acquiring raw materials, components, sub-assemblies, consumable stores 
and capital equipment for the production function. 
(b) 
Inputs for administration
.
 
Purchasing supplies and equipment for all areas of the business (eg 
microcomputers, motor cars, telephone systems, office furniture, paper and other stationery 
items). 
BPP Tutor Toolkit Copy

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CHAPTER 6
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ORGANISATIONAL CULTURE AND COMMITTEES 
 
149 
(c) 
Cost control. 
Ensuring that the organisation obtains value for money over the long term consistent 
with quality. 
(d) 
Liaison with the R&D department
. to find suppliers for materials which are to the specifications 
required by the designers. 
(e)