There are a number ofvariances in the procurement of good and the procurement of services based on the purpose of the business. Firstly if the primary focus of the business is to give service to clients then it will be highly cautious in subcontracting. As has been observed in current times, there has been a transformation from the buying of goods to service providers in many of the businesses. This is because the profit generating potential in service facilities is more than that in the sector concerned with the purchase of goods. Furthermore, for the business dealing with goods, there is a guarantee that is the good is below the standard quality then it will be replaced. However, in case of services, the concern is more with human interaction. You have the power to switch the service provider; however, it is a tiresome and a time extensive and expensive task against a well-made purchase.
1. What makes the procurement of services different from that of the purchase of goods and materials?
2. Define the alternative services that could be purchased by the hotel or in addition to the current one?
3. Do you think a centralized purchasing department is a logical way to increase purchasing efficiencies? Is it an advantage to manage service purchases by the Purchasing Department? Are there any other ways to improve the purchasing efficiency of services?