Challenges with Manual Purchasing Systems

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What does the term 'contracting' refer to in the context of purchasing?

Obtaining merchandise

Obtaining raw materials

Obtaining services (correct)

Obtaining capital equipment

Which category of buyers includes wholesalers and retailers who primarily purchase for resale purposes?

Service buyers

Capital equipment buyers

Merchant buyers (correct)

Industrial buyers

What is the primary task of industrial buyers?

Purchase capital equipment for conversion

Purchase raw materials for conversion purposes (correct)

Purchase merchandise in volume

Purchase raw materials for resale

What does the term 'Supply Management' refer to?

The broader scope of duties undertaken by purchasing professionals Signup and view all the answers

Why do merchants purchase merchandise in volume?

To benefit from quantity discounts and incentives Signup and view all the answers

What distinguishes industrial buyers from merchant buyers?

Industrial buyers purchase raw materials for conversion purposes Signup and view all the answers

What document is issued by the buyer to the selected supplier, becoming a legally binding contract when accepted?

Purchase Order Signup and view all the answers

In the purchasing process, what is issued by the buyer to identify suppliers and request pricing for routine items?

Request for Quotation Signup and view all the answers

What is retained by the issuer when a material requisition is issued in the purchasing process?

Original plus a duplicate Signup and view all the answers

Which document provides essential information for the accounting department in the purchasing process?

Material Requisition Signup and view all the answers

What becomes a legally binding contract when accepted by the supplier in the purchasing process?

Purchase Order Signup and view all the answers

What action needs to be taken by purchasing personnel once an order is accepted to ensure on-time delivery of purchased material?

Expediting the order Signup and view all the answers

What are the primary goals of purchasing according to the text?

Improving quality of finished goods produced Signup and view all the answers

Which purchasing process is described as a manual, paper-based system?

Traditional purchasing process Signup and view all the answers

What is the main aim of an effective purchasing system as mentioned in the text?

Ensuring efficient transmission of information Signup and view all the answers

How can purchasing contribute to improving product quality?

By actively seeking better materials and reliable suppliers Signup and view all the answers

What is one of the key roles of a proper purchasing system related to supplier interactions?

Efficient flows of purchased materials from suppliers to users Signup and view all the answers

Why do many companies prefer automated, electronic-based purchasing systems?

For more efficient processes Signup and view all the answers

What is one of the cost savings benefits mentioned in the text for buyers using a preferred supplier list?

Ability to purchase on a more frequent basis Signup and view all the answers

How does the system enhance accuracy in communication between buyers and suppliers?

By providing outdated information on suppliers Signup and view all the answers

What benefit do buyers gain in terms of real-time access when using the system described?

Instant posting of bids after processing requisitions Signup and view all the answers

How does the system's mobility feature impact buyer-supplier interaction?

Allows buyers to communicate with suppliers from any geographical location Signup and view all the answers

Why is it mentioned that the system allows users to assess options before preparing a purchase requisition?

To promote informed decision-making Signup and view all the answers

What is another cost-saving advantage mentioned in the text for buyers utilizing preferred supplier lists?

Elimination of the need for preprinted purchase requisition forms Signup and view all the answers

What is a common reason for organizations to outsource materials or services?

Cost advantage Signup and view all the answers

When might an organization choose to make its own materials instead of outsourcing?

To protect proprietary technology Signup and view all the answers

Why could a firm be unable to produce components in-house, leading to the need for outsourcing?

Insufficient capacity Signup and view all the answers

What is a primary reason firms might outsource components according to the text?