SUPPLY CHAIN EXAM 2 - RUTGERS
UNIVERSITY CH. 5-8
Procurement - Correct Answers -The process of selecting and vetting suppliers,
negotiating contracts, establishing payment terms, and the actual purchasing of goods
and services.
- concerned with acquiring all of the _goods, services and work_ that is vital to an
organization.
- overarching or umbrella term within which the action of purchasing can be found.
Purchasing - Correct Answers -The action of obtaining merchandise, capital equipment,
raw materials, services, or maintenance, repair, and operating (MRO) supplies in
exchange for money, or its equivalent.
- the process of how _goods and services are ordered from an external third party.
- can usually be described as the transactional function of procurement for goods or
services.
- also a term commonly used in business to represent the function of, and the
responsibility for, acquiring materials, supplies, and services for an organization.
Supply Management - Correct Answers -A newer term that _encompasses all
acquisition activities beyond the simple purchase transaction.
Purchase Requisition - Correct Answers -A document that defines the need for goods
and/or services
- An internal document
- Does not constitute a contractual relationship with an external party.
- Generated by a user department to notify purchasing personnel of items to order, their
quantity, and the timeframe.
- It may also contain the authorization to proceed with the purchase.
Purchase Order (PO) - Correct Answers -a _commercial document__. It is the official
offer issued by a buyer to a seller to acquire goods or services.
- used to control the purchasing of products and services from external suppliers.
- Indicates types, quantities, and agreed prices for products or services.
- Becomes a _legally binding contract only when accepted by the supplier.
Purchase Requisition ➔ Purchase Order ➔ Supplier Confirmation of PO
e-Procurement - Correct Answers -The business-to-business (B2B) purchase and sale
of supplies and services over the Internet.
, - the term used to describe the automation, through web-enabled tools, of the _non-
strategic__ and _transactional__________activities that would otherwise consume the
majority of a buyer's time
e-procurement process - Correct Answers -The basic e-procurement process consists
of:
An electronic _purchase requistion__and/or _purchase order_
An _invoice___(which might be one with the receipt)
A _payment_______.
Advantages of an e-Procurement System - Correct Answers -_Time savings_, _Cost
savings, _Accuracy, Real time, Management, Mobility, trackability, Benefits to the
suppliers
Merchants - Correct Answers -Wholesalers and retailers who _purchase for resale_.
Industrial Buyers - Correct Answers -Individuals within an organization who purchase
raw materials for _conversion_into products, and/or purchase services, capital
equipment, and MRO supplies.
Contracting - Correct Answers -A term often used for the _acquisition of services
Request for Information (RFI) - Correct Answers -A standard business process whose
purpose is to collect written information about the capabilities of various suppliers.
Request for Proposal (RFP) - Correct Answers -A detailed capabilities document used
to determine a supplier's _capability and interest__in the production of a product or
service.
Request for Quote (RFQ) - Correct Answers -A document used to solicit bids from
_interested and qualified suppliers__for goods or services that the organization needs
to obtain.
Primary Objectives of Purchasing - Correct Answers -1. Ensure an
_uninterrupted___flow of materials and services at the lowest total cost.
2. Improve the quality of the finished goods produced.
3. Optimize customer satisfaction.
Purchasing Process Steps - Correct Answers -1. A need is identified, and a Purchase
Requisition is issued
2. Obtain authorization as necessary
3. Identify and evaluate potential suppliers
4. Make supplier selection
5. Purchase Order (PO) is created and delivered to the supplier.
6. Supplier confirmation of the Purchase Order
7. Fulfillment
UNIVERSITY CH. 5-8
Procurement - Correct Answers -The process of selecting and vetting suppliers,
negotiating contracts, establishing payment terms, and the actual purchasing of goods
and services.
- concerned with acquiring all of the _goods, services and work_ that is vital to an
organization.
- overarching or umbrella term within which the action of purchasing can be found.
Purchasing - Correct Answers -The action of obtaining merchandise, capital equipment,
raw materials, services, or maintenance, repair, and operating (MRO) supplies in
exchange for money, or its equivalent.
- the process of how _goods and services are ordered from an external third party.
- can usually be described as the transactional function of procurement for goods or
services.
- also a term commonly used in business to represent the function of, and the
responsibility for, acquiring materials, supplies, and services for an organization.
Supply Management - Correct Answers -A newer term that _encompasses all
acquisition activities beyond the simple purchase transaction.
Purchase Requisition - Correct Answers -A document that defines the need for goods
and/or services
- An internal document
- Does not constitute a contractual relationship with an external party.
- Generated by a user department to notify purchasing personnel of items to order, their
quantity, and the timeframe.
- It may also contain the authorization to proceed with the purchase.
Purchase Order (PO) - Correct Answers -a _commercial document__. It is the official
offer issued by a buyer to a seller to acquire goods or services.
- used to control the purchasing of products and services from external suppliers.
- Indicates types, quantities, and agreed prices for products or services.
- Becomes a _legally binding contract only when accepted by the supplier.
Purchase Requisition ➔ Purchase Order ➔ Supplier Confirmation of PO
e-Procurement - Correct Answers -The business-to-business (B2B) purchase and sale
of supplies and services over the Internet.
, - the term used to describe the automation, through web-enabled tools, of the _non-
strategic__ and _transactional__________activities that would otherwise consume the
majority of a buyer's time
e-procurement process - Correct Answers -The basic e-procurement process consists
of:
An electronic _purchase requistion__and/or _purchase order_
An _invoice___(which might be one with the receipt)
A _payment_______.
Advantages of an e-Procurement System - Correct Answers -_Time savings_, _Cost
savings, _Accuracy, Real time, Management, Mobility, trackability, Benefits to the
suppliers
Merchants - Correct Answers -Wholesalers and retailers who _purchase for resale_.
Industrial Buyers - Correct Answers -Individuals within an organization who purchase
raw materials for _conversion_into products, and/or purchase services, capital
equipment, and MRO supplies.
Contracting - Correct Answers -A term often used for the _acquisition of services
Request for Information (RFI) - Correct Answers -A standard business process whose
purpose is to collect written information about the capabilities of various suppliers.
Request for Proposal (RFP) - Correct Answers -A detailed capabilities document used
to determine a supplier's _capability and interest__in the production of a product or
service.
Request for Quote (RFQ) - Correct Answers -A document used to solicit bids from
_interested and qualified suppliers__for goods or services that the organization needs
to obtain.
Primary Objectives of Purchasing - Correct Answers -1. Ensure an
_uninterrupted___flow of materials and services at the lowest total cost.
2. Improve the quality of the finished goods produced.
3. Optimize customer satisfaction.
Purchasing Process Steps - Correct Answers -1. A need is identified, and a Purchase
Requisition is issued
2. Obtain authorization as necessary
3. Identify and evaluate potential suppliers
4. Make supplier selection
5. Purchase Order (PO) is created and delivered to the supplier.
6. Supplier confirmation of the Purchase Order
7. Fulfillment
