The Goal of Vendor Analysis Is

question 234

Multiple Choice

The goal of vendor analysis is

• A) just getting a low price from the supplier on a given part or service.
• B) just satisfying the needs of the customer company.
• C) lowering the total costs associated with purchases.
• D) satisfying the needs of the individuals who influence the purchase.
• E) focusing buyers and sellers on just the economic factors needed to reduce costs.

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Definitions:

Variable Administrative Expense

Costs that vary directly with changes in business activity levels, like sales commissions or raw material costs.

Direct Materials

Raw materials that are directly incorporated into a finished product and can be easily traced to it.

Discretionary Fixed Costs

Discretionary fixed costs refer to fixed costs that can be altered in the short term by current managerial decisions, such as advertising or research and development expenses.

Management Decisions

These are choices made by the executives of a company affecting its direction and operation.