What is CENTRALIZED PURCHASING?

One common purchasing organization manages one purchasing system for all purchase needs of all of the departments of a company in a wide geographical distribution. Centralized purchasing helps negotiating the best deals with local vendors for the corresponding location of the company department. It helps to avoid order duplication. It gains benefits from high volume bulk discounts, lower transportation and inventory management costs, organized transactions and improved vendor relationships. Typically sits in the company headquarters. Opposite of decentralized purchasing.

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