Impact Of Purchasing Research On The Profitability Of An Organization

Project and Seminar Material for Purchasing and Supply PS

Impact Of Purchasing Research On The Profitability Of An Organization


This is a Research on the impact of purchasing Research in the profitability of an organization.

This research project is written to analyze critically the strategic involved in the impact of purchasing research, how it will profit the organization and the basic need to adopt the purchasing research for the profitability of an organization. It will help together useful information about the product which is to be purchased, to ensure the quality and quantity and at a good price. It is also intended to make useful suggestions and recommendation that will help in purchasing materials for the organization.

The language used is simple enough to be understood by the readers.

This research project has been specifically and carefully prepared in five chapters.

  • Chapter One: of the study, statement of the problem, objective of the study,
  • Chapter Two: The researcher reviews the related literature.
  • Chapter Three: It centers on Research methodology,
  • Chapter Four: Is about data presentation, Testing of hypothesis
  • While Chapter Five: is all about the summary, Conclusion, recommendation and Bibliography.

Chapter One

1.0 Introduction

1.1 Background Of The Study

Research affects all spheres of man’s activities.

The companies are not therefore lift out, especially as regards materials, sources of supply and other important and related issue about purchasing, hence purchasing research.

The first world countries have embraced research that they have made remarkable and outstanding success and progress in the technological advancement of the world. This study seeks to encourage third world countries especially Universities and Polytechnics research institutions and the like not to overlook the importance of research.

More so, Companies are advices to pay good attention to the conditions of purchasing research for their increased profitability. They are encouraged to know that purchasing research is a tool that can assist them in their daily purchasing decisions. As an aid to enhance purchasing activities, companies are against this background expected to embrace purchasing research and provide the finance necessary to carry out the research for better performance of the purchasing function, which in turns contributes to the overall organizational profitability.

1.2 Statement Of The Problem

It is pertinent to know that third world countries are yet to appreciate the contributions of purchasing not to talk of purchasing research in manufacturing organization. This being the case has let to the issues of buying sage” where the marketing manager, the Accountant and even the managing director, will want to buy materials and other parts necessary to support production in an undertaking.

If profit oriented organization can embrace purchasing as one of the top managerial function, then research will take its proper form or position.

It is against this background that the researchers’ interest heighted to create the conscion sness in the minds of the “Uninformed generals the purchasing research is of great importance and relevant in the profitable of an organization.

Furthermore, the research is recommending that organization should come to terms with purchasing by separating the purchasing department from other department like marketing, Accountant products etc and give it top management approval. It should not be only regarded as routine day to day or clerical activity but should be seen as a management functions, that goes beyond ordinary buying and selling.

From the forgoing, the statements of this problem are:-

  1. Purchasing research is important and so should not be over looked.
  2. It’s contribution to an organization profitability is enormous
  3. Funds should be made available to carry out purchasing research.
  4. What areas are necessary for purchasing research to be carried out?
  5. What are the impacts of the purchasing function as purchasing research?

1.3 Objectives Of The Study

As earlier stated, purchasing by its nature is a basic and integral part of business management. In addition, the basic goal pf any business organization is to produce goods and service which can be marketed at a profit.
However, this goal is achieved by blending appropriately the five m’s of management via machine, manpower, materials. Having been seen as the life blood of industries and a much need not be treated carelessly.

Purchasing research is therefore undertaken to solve problems such as sudden shortage or can unacceptable price increase or in response to other exceptional situation such commercial transaction or in the rate of exchange.

From the forgoing the objectives of this stuffy are:-

  1. To ascertain the important areas of purchasing research.
  2. To investigate into important areas of purchasing research.
  3. To examine the reasons for purchasing research
  4. To X-ray the relationship between purchasing research in the profitability of the organization
  5. To find out the relationship between purchasing research and the company’s profitability.

1.4 The Significance Of The Study

This study or research work is very important to a number of persons.

To me as the researcher, carrying out this research is an adventure. In the course of this writing, it is a way of developing my talent and creative gift of writing as a student. Again, it is a requirement for the award (H.N.D) Higher National Diploma Certificate in purchasing and supply chain management.

In addition, this study will serve as a data bank for reference point for other research; furthermore, the department of purchasing in every industry will appreciate the contents of this research work as it will assist them in their constant research for material, personal, suppliers, on commodities and on purchasing procedures.

In addition, this research will profit a number of students in the purchasing and other department of any institutions of higher learning by provides a yardstick topic or standard for such student when they shall make reference to these materials.

1.5 Research Questions

  1. What is the position of purchasing in your industry?
  2. If purchasing is given a top management approval, is purchasing research of important concern to management?
  3. How ha purchasing research contributed to the company’s overall profit ability?
  4. What are the areas that purchasing research is carried out in your industry?
  5. What impact has purchasing research been playing in your industry?

The following hypothesis have been put forward in order to carry out with this research work.

Hypothesis 1

Ho: Purchasing research does not contribute to the company’s profitability
Hi: Purchasing research contributes to the company’s profitability.

Hypothesis II
  • Ho: The impact of purchasing research does not affect the entire industry.
  • Hi: The impact of purchasing research affects the entire industry.

1.7 Scope Of The Study

Purchasing research is an important and vast area of study, more also, it carry out by a lot manufacturing firm in order to increase their profitability. This being the case, this research work will only cover purchasing research on purchase material product, or services, purchasing personnel, on suppliers, on commodities and on method of purchase, that is purchasing procedure of system.

Furthermore, this work will concentrate on profit making organization precisely manufacturing industries with particular reference to Peterson zochonis plc. (p.z. Industries plc, Aba, Abia State).

1.8 Limitation Of The Study

In carry out this research work, a lot of things interested me for example, the Joy of ending first degree with writing of project, however the researcher was constrained as a nursing mother and with time because we were given a short period to write.

There was problem of insufficient research materials on the topic; these problems were however adjusted to by the researcher in order to ensure that this research work is a success.

1.9 Definitions Of Terms

It is also important to define some in familiar terms so that other researcher can find their meaning easily in case they want to make use of this work.


Is defined as planned buying. It is a function in the organization that fulfill organizational needed through acquisition of the right materials, supplies, plant, tools, machineries and services that will enable the organization attain its targeted goal.


This is a sustained inquiry into problems and seeking out way to solve it. According to Anyanwu (2006). Research is a “Systematic and objective search for and analysis of data with a view to generate information necessary for the solution of problems.

Purchasing Research:

According to A.M. Uzor (2003), Purchasing research is defined as the systematic collection classification and analysis of data as the basis for better purchasing decision. It is concerned with collecting and analyzing information concerning the supplies environments as a basis for planning strategies for the future.


These are the people who supply materials, parts, goods or services to the buying organization

This is a firm that may be either profit or non profit oriented that exist for the sake, of producing goods and services at the profit or rendering services.


A statement of preposition which can be investigated to either be true or false.


This is the end target of every profit oriented firm increasing their capital base in the form of additional revenue which can be ploughed back into the business as retains earnings.

Impact Of Purchasing Research On The Profitability Of An Organization

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