purchasing

Competitive bidding process

A method of collecting price quotes from suppliers vying for an order or job.

Credentials

Information about a person’s or business’s skills, abilities, and qualifications.

Goods

Tangible objects that can be manufactured or produced for resale.

Guarantee

A promise made to the consumer that a product’s purchase price will be refunded if that product is not satisfactory; often called a money-back guarantee.

Invoice

The formal, printed record of a sale that includes all necessary information as to the buyer, the seller, items purchased, amounts, prices, delivery date, credit or discount terms, etc.

Make-or-buy decision

The act of determining whether to produce a needed part or purchase it from a supplier.

Manufacturer

A type of producer that changes the shapes or forms of materials so that they will be useful to consumers.

Negotiation

The process of one party reaching an agreement with another party to meet specific needs or wants.

Productivity

The amount and the value of goods and services produced (outputs) from set amounts of resources (inputs).

Profit margin

A ratio of net profit (after taxes) divided by net sales that reflects the profit per dollar of sales.

Purchase agreement

A purchase contract that lists the good(s) or service(s) to be purchased, the quantity to be purchased, the price, terms of delivery, payment information, warranty and guarantee information, and other details as needed.

Purchase order

The form that a business fills out to order goods; may be the same as a purchase agreement or purchase contract.

Purchasing

The buying of goods and services for a business.

Purchasing process

A series of sequential steps taken by purchasing specialists to buy goods and services for a business.

Retailer

A business that buys consumer goods or services and sells them to the ultimate consumer.

Services

Intangible activities that are performed by other people for money.

Specifications

Standards that are established and described in detail; requirements.

Strategic planning

Long-range planning (three to five years) for the company as a whole.

Suppliers

Vendors; businesses from which other businesses buy goods or services.

Transformation

A change in the shape or appearance of an object.

Warranty

A promise made by the seller to the consumer that the seller will repair or replace a product that does not perform as expected.

Wholesalers

Intermediaries who help move goods between producers and retailers by buying goods from producers and selling them to retailers.