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Problem

The levels of risk associated with organizational purchases range from low to high. Discuss how the buying process for a risky purchase differs from the process for a routine purchase.

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There is no way of eliminating risk from organizational purchasing. Levels of risk associated with organizational purchase range from low to high.

However, buying processes differs in many aspects for a risky purchase and a routine purchase. It is explained below in detail:

• Decision making:

Individual decision takes place when the risk is low where decision makers grow in number when the risk is high.

• Personnel involvement:

Huge number of personnel with high designation is required for high risk purchases unlike routine purchases.

• Information:

Mere information is sufficient for low risk purchases where huge sources of wide variety of information are needed for a risky one.

• Effort required:

Tremendous effort is needed for risky purchases by buying centers where casual involvement includes in a routine purchases.