In a decentralized purchasing setup, decision-making authority is typically located where?

• A. Local unit
• B. Corporate headquarters
• C. Shared services center
• D. External broker

Answer: (A)

In a decentralized purchasing setup, decision-making authority resides at the local unit, such as the individual store or restaurant location, rather than at corporate headquarters. This arrangement gives local managers the power to source, select suppliers, negotiate terms, and approve purchases based on local needs, menus, and conditions. It supports faster decisions, closer relationships with nearby suppliers, and better responsiveness to local market changes.

Central corporate headquarters would imply centralized purchasing decisions. A shared services center acts as a hub to process transactions and provide support, but the actual authority to decide what to buy often remains with the local unit in decentralization. An external broker is a third party for sourcing, not the internal decision-maker for the organization.