ABSTRACT
The entry provides an overview of purchasing functions. It notes that purchasing is increasingly becoming strategic. In many firms purchasing has been seen as a clerical activity. The emergence of the supply chain management concept has enlightened managers about the strategic role played by purchasing. Purchasing helps to determine a firm's cost structure through negotiations with suppliers. Purchasing initiatives can lead to reducing inventory and improving the quality of incoming parts and components through vendor selection and supplier development. Purchasing also supports new product development by encouraging supplier involvement in product development.
