Purchasing History
Purchase Systems
Purchase Procedure
Purchase Flow Chart
Source Selection
Public Procurements
Government e Market (GeM)
Creative Purchasing
Price Forecasting
Speculative Buying
Purchasing ethics
Purchase Timing
Make or Buy
Vendor Management
Legal aspects
Reverse Auction
Forward Buying
Tender Buying
Rate Contract
Reciprocity in buying
Zero Stock buying
Materials Mgt Vocabulary
Articles on MM
Supply Chain Management
E-book on Stores
YouTube Channel on MM

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Forward Buying


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 usually done for Raw materials but is not limited to it. Now a days , with competition becoming globalised such an arrangement is a win-win situation for both , the buyer and the supplier.