What is Direct Materials Budget?

Procurement professionals use a direct materials budget to calculate how much raw materials they must buy within a certain period to meet a production budget.

Direct materials spending is considered critical as it can affect supply chains, customer sales, and, therefore, the top and bottom lines of an enterprise. Managing direct spending is not just a priority for highly dynamic business environments; it’s a way to gain strategic competitive advantage. 

Learn more about the supply chain and procurement software solutions offered by GEP.

Related Terms

What is Dashboard?What is Decentralized Procurement?What is Dedicated Resources?What is Demand Forecasting?What is Demand Management?