Purchasing Portfolio Models: A Critique and Update

Abstract

Summary Purchasing portfolio models have spawned considerable discussion in the literature. Many advantages and disadvantages have been put forward, revealing considerable divergence in opinion on the merits of portfolio models. This study addresses the question of whether or not the use of purchasing portfolio models is considered as a sign of purchasing sophistication. Using data from a broad sample of industries, it was found that purchasing sophistication is a two‐dimensional construct: purchasing's professionalism and purchasing's position within companies. Results revealed that the position and the professionalism of purchasing are both positively related to the greater use of purchasing portfolio models. Findings indicate that portfolio usage is definitely a sign of purchasing sophistication.