Shared Flashcard Set

Details

NCMA Bk2-4
Book 2, Chapter 4
28
Accounting
Professional
08/11/2008

Additional Accounting Flashcards

 


 

Cards

Term

 

New Buy

**Buying Situations**

Definition

 

Purchase a product for the first time. 

 

ex.  New paging system in plant.

 

-generally open to new vendors

- no long term relationships

- specs may be fluid

Term

 

 

Evaluation Criteria

**For Purchasing**

Definition

 

1) Quality

 

2) Service

 

3) Price

Term

 

 

Federal Government

Definition

 

Most of the Fed Government buying is centralized, no single Fed agency contracts for all the Govt's req.s and no single buyer of any agency purchases all that the agency needs.

 

spends over $600 Billion/yr, largest consumer in world

Term

 

 

Institutions

Definition

**fourth major segment**

 

Segment Includes schools, hospitals, solleges, and universities churches, lobor unions, fraternal organizations, civic clubs, foundations, etc.

 

*none business organizations*

Term

 

 

Government

Definition

 

Includes 1000s of Federal, state, and local buying units.

 

Largest single market for goods & services in the world.

Term

 

 

Rules of a buying center

Definition

 Initiator: person who suggests making purchase.

Influencers/evaluators: person who indluences buying decision.

Gatekeeper: Members who regulate flow of info

Decider: Person with formal or informal power to choose.

Purchaser: Person who negotiates the purchase

User: person who will ue the product.

Term

 

 

 

Buying Center

Definition

 

All those persons in an organization who become involved in the purchase decision.

 

Can be engineers, contracting officers, etc.  Vary from one organization to another.

Term

 

 

 

Business Services

**Business products**

Definition

 

Expense items that do not become part of a final product.

 

ex. janatorial, consulting, advertising, maintance, etc.

Term

 

 

 

Supplies

**Business products**

Definition

 

Consumable items that do not become part of the final product. maintenance, repair or operating supplies.

 

ex. pens and paper

 

 

Term

 

 

Processed Materials

**Business products**

Definition

 

Products used directly in manufacturing other products. Not raw material, has some processing

 

ex. sheet metal, chemicals, lumber, corn syrup.

Term

 

 

 

Accessory Equipment

**Business products**

 

Definition

 

Goods such as portable tasks and office equipment less expensie and short lived then major equipment.

Term

 

 

Raw Materials

**Business products**

Definition

 

unprocessed extractive or agricultured products, such as mineral ore, lumber, wheat, corn, fruit, vegatables, and fish.

Term

 

 

Component Parts

**Business products**

Definition

 

Either finished items ready for assembly or products that need very little processing before becoming part of some other products.

Term

 

 

 

Major Equipment (installations)

**Business Products**

Definition

 

expensive machines, main frames, blast furnaces, generators, airplanes, etc.

 

Are depreciated over time rather than changed as an expense in the year it is purchased.

Term

 

 

Reciprocity

Definition

 

business purchasers choose to buy from their own customers.

 

ex. Ford engine manuf. buy Ford trucks for its truck needs.

Term

 

 

 

 

Purchase volume

Definition

 

 

Business buy much larger quantities than consumers.

 

ex. Ford buys 1000s of tires at a time.

Term

 

 

 

Fluctuating Demand

Definition

 

Demand for business products is more volitile then consumers products.

 

ex Plants & equipment are required every few years.

Term

 

 

 

Joint Demand

Definition

 

Demand dependent on availability of other components of end product.

 

ex. Apple OS demand will continue as long as demand for Apple Computer is strong.

Term

 

 

 

Inelastic Demand

Definition

 

Increase or decrease in price will not significantely affect demand

 

ex. 50% increase in car paint will not effect demand for cars.

Term

 

 

 

Derived Demand

Definition

 

Org. buy products to be used in their customers products

 

ex. Harddrive demand dependent on computer demand.

Term

 

 

 

Demand

Definition

 

Demand in Business Market

 

-Derived demand

- Inelastic demand

- Joint demand

- Fluctuating demand

Term

 

 

 

 

NAICS

Definition

 

North American Industry Classification System

 

-classification for business establishments

-used by NAFTA

Term

 

 

 

Resellers

Definition

 

 

Reseller market includes retail and wholesale businesses that buy finished goods and resell them for profit. sometimes called distributors.

Term

 

 

Original Equipment Manufacturers (OEM)

Definition

 

Individual or organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers.

 

Sometimes caled  "producers"

** Companies like GM that buy steel, paint, tires, and batteries.

Term

 

 

Strategic Alliances

Definition

 

Called a strategic partnership is a cooperative agreement between business firms.

 

- licensing or distribution agreements

- joit ventures

- R&D consortia

- partnership

Term

 

 

 

Business Marketing

Definition

 

marketing of goods and services to individual and organizations for purposes other then personal consumption.

 

ex. Sale of a personal computer to your college or university.

Term

 

 Modified Rebuy

**Buying Situations**

Definition

 

Some change to the original good or service.  May be new color, greater strength in plastic, additional service in janatorial service.

 

-sometimes open to new vendors

-relationship exists

Term

Straight Rebuy

**Buying situation**

Definition

 

Not looking for new information.  New order is placed on same terms as previously.

 

-strong relationship

-no competition

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