---
title: "Meaning of purchasing and procurement"
subject: "Organization and Management"
chapter: 6
key: "semester_7/organization_and_management:purchasing-procurement"
source: https://www.bctengineer.com/q/semester_7/organization_and_management/purchasing-procurement
site: BCT Engineering
---

# Meaning of purchasing and procurement

Organization and Management · Chapter 6: Purchasing and Marketing Management

- Asked in: 2071 Chaitra, 3 marks
- Video: [Procurement vs Purchasing (Supply Chain Basics)](https://www.youtube.com/watch?v=eI4jxpt53WQ) — MVC Logistics Academy
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/organization_and_management/purchasing-procurement
- Whole chapter: https://www.bctengineer.com/md/semester_7/organization_and_management/chapter-6

## Question

What do you mean by purchasing and procurement?

## Short answer

Purchasing is the act of buying materials/services with the five rights (right quality, quantity, price, source, time). Procurement is a broader process covering planning, sourcing, tendering, contracting, receipt, and disposal, governed in Nepal by the Public Procurement Act, 2063. Procurement includes purchasing but also strategic supply management.

## Answer

#### Purchasing
Purchasing is the act of buying materials, goods and services from outside suppliers for use in an organization, at the right quality, quantity, price, time and source. It mainly covers the buying activity: selecting suppliers, negotiating, issuing the order and payment.

#### Procurement
Procurement is a wider term that covers the entire process of acquiring goods, works and services, including planning needs, specifying requirements, selecting sources, bidding, contracting, receiving, inspection, payment, contract management and disposal. It also covers purchasing of construction work and consulting services. In Nepal it is regulated by the **Public Procurement Act, 2063** and its Regulations, 2064, with the Public Procurement Monitoring Office (PPMO).

| Basis | Purchasing | Procurement |
|---|---|---|
| Scope | Narrow; buying activity | Broad; whole acquisition cycle |
| Focus | Transaction | Strategy and relationships |
| Includes | Order, price | Planning, sourcing, contract, disposal |

Example: A hospital ordering oxygen cylinders is purchasing; planning annual needs, running a tender, signing a contract and managing supplier performance is procurement.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. How does procurement differ from purchasing?
   A. Purchasing includes disposal and contract management
   B. Procurement covers the whole acquisition cycle; purchasing mainly the buying activity
   C. Procurement is narrower
   D. They are identical
   Answer: B. Procurement is broader, from planning to disposal. (Key point: Scope difference)

2. Which activity is procurement, not mere purchasing?
   A. Writing a cheque
   B. Planning annual needs, tendering, contracting and managing supplier performance
   C. Paying one invoice
   D. Placing an order for oxygen cylinders
   Answer: B. The whole cycle is procurement. (Key point: Hospital example)

3. Which law regulates procurement in Nepal?
   A. Public Procurement Act, 2063
   B. Bonus Act, 2030
   C. Partnership Act, 2020
   D. Labour Act, 2074
   Answer: A. The Public Procurement Act, 2063 with PPMO regulates it. (Key point: Nepal law)

## Related in other subjects

- [Value engineering in material procurement](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-engineering-procurement) — Construction Management, chapter 3, asked 3×
- [Procurement management processes in construction](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproject-procurement-management-processes) — Project Engineering, chapter 4
- [Project procurement management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aproject-procurement-management) — ICT Project Management, chapter 13
- [Contract procurement performance review](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aprocurement-performance-review) — ICT Project Management, chapter 13