Purchasing methods. The first object in purchasing is to secure the goods needed, at the time when they are needed. The second object is to secure them at the lowest price or upon the most favorable terms. It may be noted here, that the purchasing agent makes his purchases on a basis of the utility of the goods and not merely by weight or quantity. Coal, for example, may be purchased by calories instead of by tons, and gas on the basis of British Thermal Units instead of merely cubic feet. The practical importance of the distinction between utility and mere quantity may be appreciated by anyone who has noticdd how little light could be had during the time of the war, when toluol was washed out of the gas for munitions purposes, leaving the gas reduced in lighting value by some 20 per cent, while the consumer still paid the same price per cubic foot. Within reasonable limits, at any rate, insisting upon the lowest price has a sound justification from the economic standpoint. While at first thought it might seem that it should make little or no difference to society Whether the one or the other of the parties to the transaction obtained the advantage, it must be noted that when goods are bought consistently at the lowest possible price which leaves the seller a reasonable profit, the incapable or unfavorably situated dealers are forced out of business, leaving production in the hands of those who are able to carry on its processes with the least amount of waste. Reducing the dealer's margin of profit, moreover, forces him continually, to devise and put into practice improved methods, resulting obviously in a general economic gain....

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