Chapter 6

Question 1

Business and Organizational Customers:

Answer 1

Any buyers who buy for resale or to produce other goods and services. Types include:

Producers of goods and services
Intermediaries
Government units
Nonprofit organizations

Question 2

Purchasing Specifications:

Answer 2

A writter description of what the firm wants to buy.

Question 3

ISO 9000:

Answer 3

A way for a supplier to document its quality procedures according to internationally recognized standards.

Question 4

Purchasing Managers:

Answer 4

Buying specialists for their employers and, in large companies, usually specializing by product area and are real experts.

Question 5

Multiple Buying Influence:

Answer 5

Several people play a part in making a purchase decision (perhaps even top management for example). Possible buying influences include:

1. Users - Perhaps production line workers or their supervisors
2. Influencers - Perhaps engineering or R&D people who help write specifications or supply information for evaluating alternatives
3. Buyers - The purchasing managers who have the responsibility for working with suppliers and arranging the terms of the sale
4. Deciders - the people in the organization who have the power to select or approve the supplier; often a purchasing manager but perhaps top management for larger purchases
5. Gatekeepers - people who control the flow of information within the organization; perhaps a purchasing manager who shields users or other deciders. Can also include receptionists, secretaries, research assistants, and others who influence the flow of information about potential purchases.

Question 6

Buying Center:

Answer 6

All the people who participate in or influence a purchase. Different people may make up a buying center from one situation to the next.

Question 7

Vendor Analysis:

Answer 7

A formal rating of suppliers on all relevant areas of price and performance.

Question 8

Requisition:

Answer 8

A request to buy something.

Question 9

New-Task Buying:

Answer 9

Occurs when a customer organization has a new need and wants a great deal of information. Can involve setting product specifications, evaluating sources of supply, and establishing an order routine that can be followed in the future if results are satisfactory. Multiple buying influence is most often found in new-task buying.

Question 10

Straight Rebuy:

Answer 10

A routine reprchase that may have been made many times before.

Question 11

Modified Rebuy:

Answer 11

The in-between process where some review of the buying situation is done, though not as much as in new-task buying.

Question 12

Competitive Bid:

Answer 12

The terms of sale offered by the suppliers in response to the purchase specifications posted by a buyer.

Question 13

Just-In-Time-Delivery:

Answer 13

Reliably getting products there just before the customer needs them.

Question 14

Negotiated Contract Buying:

Answer 14

Agreeing to contracts that allow for changes in the purchase arrangements.

Question 15

Outsource:

Answer 15

Contracting with an outside firm to produce goods or services rather than to produce them internally.

Question 16

North American Industry Classification System (NAICS):

Answer 16

Codes used by business and government to classify business establishments according to type of economic activity (process of production).

Question 17

Foreign Corrupt Practices Act:

Answer 17

Prohibits U.S. firms from paying bribes to foreign officials.