Question

A purchasing plan can mean the difference between success and failure of a small business. Why is it important to develop a purchasing plan? What should be included in a purchasing plan?

Answer 1

A purchase plan is the plan that describes the material purchased by a company which might be raw material or packaging material and the costs associated with the purchase. This plan helps the company to analyse what it wants and how it would like the material to be. When the purchase done is of good quality, the end product of the company will also come out of good quality which will make the business a success. But if the material is of low quality it will lead to the failure of the whole project. Hence purchasing plan is very important for any business and hence every business must develop it. Every purchase plan must include the details of the product, amount purchased and amount paid, past history of similar purchases and other details about the material . These details helps us understand how well our plan is going and what are the modifications required for the next plan.