What type of system does a small business operation use when there is no purchasing department?

What type of system does a small business operation use when there is no purchasing department?

• A. Hybrid
• B. Decentralized
• C. Centralized
• D. Automated

Answer: (B)

With no purchasing department, the authority to buy sits with the individuals who use the goods—each department manager or user makes their own purchasing decisions. This distributes purchasing responsibilities, which is decentralized purchasing. It allows quick, needs-specific buys and customization for each area, but can limit consistency and bargaining power compared to a single central buyer. Centralized would put all purchasing under one function, a hybrid mixes approaches, and automated describes the use of technology in purchasing rather than how decision-making is organized.

With no purchasing department, the authority to buy sits with the individuals who use the goods—each department manager or user makes their own purchasing decisions. This distributes purchasing responsibilities, which is decentralized purchasing. It allows quick, needs-specific buys and customization for each area, but can limit consistency and bargaining power compared to a single central buyer. Centralized would put all purchasing under one function, a hybrid mixes approaches, and automated describes the use of technology in purchasing rather than how decision-making is organized.