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Forward
Buying : Forward Buying as the name suggests is the system
under which buying is done with longer term in
perspective. It is not meant for meeting the present
consumption requirement. It is rather a commitment on part
of both the buyer and the seller , normally for a period
of one year. Depending upon the availability of the item,
the financial policies, the economic order quantity, the
quantitative discounts, and the staggered delivery, the
future commitment is decided. A few organisations do
“hedge”, particularly in the commodity market by selling
or buying contracts.
Forward buying helps a firm in booking capacity of a
supplier and thus often results into a safeguard against a
competitor acquiring his capacity. It is |
