The Typesof Purchasing. (Cost Accounting)
Following are the different types of purchasing or classes of buyers:
- Personal Purchasing: Consumers who purchase for their personal consumption come under this category. They form the most important class of buyers because they ultimately use all the products of the economy. The whole economy depends upon this group of buyers for its survival because most of the items to be produced are to be ultimately purchased by this group.
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- Mercantile purchasing: This type of purchasing is done for resale. Under this group come middlemen who purchase not for their own consumption, but to meet others’ requirements. Middlemen can be distributors, wholesalers, retailers and agents who form the channels of distribution of the manufactured goods from the manufacturers to the consumers. In such type of purchasing, the purchaser must select what the customer wants and which he can sell at a price which includes a reasonable profit.
- Industrial purchasing: This type of purchasing is done for consumption or conversion of material purchased into finished product. It involves buying of raw materials, components, consumable stores and supplies, spares and tools, machines and equipments, office supplies and office appliances. To make industrial purchasing other functions of the organisation.
- Institutionalized or government purchasing: Under this group come governmental agencies and institutions who buy for public utilities. They form an important group of purchasers because they purchase in bulk.