A decentralized purchasing system is most often used by which type of establishment?

A decentralized purchasing system is most often used by which type of establishment?

• A. Single-unit operation
• B. Corporation with centralized procurement
• C. Franchise operation
• D. Multi-unit chain

Answer: (A)

Decentralized purchasing means each unit handles its own buying decisions rather than a central office placing orders for all locations. This fits best when there is only one unit to manage, because there’s no need to coordinate across multiple locations or enforce uniform supplier contracts. In a single-unit operation, the manager can respond quickly to menu changes, seasons, or shortages and tailor purchasing to the unit’s exact needs. In contrast, a corporation with centralized procurement relies on a central team to negotiate and place orders for all locations, a franchise operation often has centralized sourcing to ensure consistency and brand standards, and a multi-unit chain typically benefits from centralized purchasing to achieve volume discounts and standardization. Thus, the setup most naturally using decentralized purchasing is a single-unit operation.

Decentralized purchasing means each unit handles its own buying decisions rather than a central office placing orders for all locations. This fits best when there is only one unit to manage, because there’s no need to coordinate across multiple locations or enforce uniform supplier contracts. In a single-unit operation, the manager can respond quickly to menu changes, seasons, or shortages and tailor purchasing to the unit’s exact needs. In contrast, a corporation with centralized procurement relies on a central team to negotiate and place orders for all locations, a franchise operation often has centralized sourcing to ensure consistency and brand standards, and a multi-unit chain typically benefits from centralized purchasing to achieve volume discounts and standardization. Thus, the setup most naturally using decentralized purchasing is a single-unit operation.