Which type of purchasing is aimed at reducing on-hand inventory?

Stockless purchasing is a strategy specifically designed to minimize on-hand inventory levels. This approach emphasizes direct purchasing from suppliers based on immediate needs rather than maintaining a large inventory stock. By opting for stockless purchasing, organizations can reduce warehousing costs, lower the risk of inventory obsolescence, and respond more flexibly to changes in demand.

This method often involves just-in-time (JIT) practices, where items are delivered to the production line or end-user precisely when they are needed, rather than being stored in a warehouse. This not only streamlines operations but also encourages closer relationships and better communication with suppliers to ensure timely deliveries.

In contrast, long-term purchasing tends to focus on securing materials at predetermined prices over an extended period, which could lead to higher on-hand inventory as organizations stock up on materials. Batch purchasing entails buying items in groups based on projected needs, which might not effectively reduce inventory levels. Capital purchasing relates to purchasing long-term assets or equipment rather than consumables, which does not directly pertain to inventory management.