A traditional aphorism listing a number of key objectives of purchasing: ‘every purchasing act must satisfy the following five criteria: to buy goods or services of the right quality, in the right quantity, from the right source, at the right time and at the right price.’ The concept is based on the premise that purchasing is about trade-offs: if we specify a lower grade or quality, this may result in a lower price, if we buy more, we may access a lower price. Price is always listed as the last ‘right’ as it is often the permutation of the other factors that affects what price is paid. The concept has largely been superseded, as, while conceptually attractive, there is no advice about what is ‘right’, or how to achieve it. Furthermore, the criteria listed are transactional in character, and contemporary perspectives on procurement would add a variety of other dimensions to be considered, such as risk, sustainability, total cost and stakeholder engagement. See also Portfolio Analysis and Risk.« Back to Glossary Index
Discover the world’s largest Glossary of Procurement terms
With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.