Purchasing Policies

Purchasing Policies

• Ancillary Development: The firms sub-contracts, i.e., decides to buy the parts from outside suppliers. Mostly the fabricated parts, components are brought from outside suppliers by the firms.
• Make or buy: Another purchasing policy is whether to buy the parts or components from outside supplier or manufacture within the firm. The decisions lie depending in various factors.
• Speculative buying: Speculative buying is conducted with the hope of making profit out of price changes. Here the profit is made by buying at low price and selling at higher price.