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The primary benefits of a centralized purchasing function are cost-savings and standardization of the product or service purchased. The downside of centralized purchasing is the lack of control or choice by the end-user. If an end-user does not adequately communicate requirements (for example, quality and delivery) of a purchase to the centralized purchaser then there can be suboptimal results.

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13y ago
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9y ago

Centralization provides advantages to purchasing because it offers the company the ability to purchase in larger quantity, which results in better pricing. The disadvantage to centralization is that higher management is segregated to the main locations. Decentralization is better for more individualized segments; however this option does not offer better purchasing discounts.

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Q: Advantage and disadvantage of centralization and decentralization purchasing?
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