Basic Purchase Planner Interview Preparation Guide

Download PDF

Reciprocal trading provides participating nations with equivalent competitive trading opportunities based on mutual agreements negotiated to adjust tariffs, duties, and customs restrictions in order to increase foreign trade and improve border-to-border relationships among participating countries.

Counter trading offers cash poor countries and organizations greater access to the world markets by offering them an alternate method of acquiring goods.

The continuous process of measuring a company's products, services, costs, and practices against those of competitors or organizations that display "best in class" achievements.

A bidding procedure usually consisting of two competitive steps. Step one consists of a technical proposal for furnishing the product or service and the second step consists of a comparison of costs. Bidding then proceeds as in conventional sealed bid procedures.

When there is a lack of pricing information available to determine price reasonableness, a cost analysis could be performed to evaluate and verify a vendor's cost data and proposed profit.

Purchasing cards are a purchasing tool many progressive companies use to purchase and pay for low dollar purchases. Purchasing cards reduce the cost of doing business while preserving purchasing controls.

Life cycle costing is the total cost of purchasing, operating, maintaining, supporting and disposing of a product.

The term "and/or" should not be used in agreements. Ambiguity arises when this term is used because of the many possible variations this term can create. It is more exact to use the terms "and" and "or" separately. The term "and" means both, the term "or" means either.

The supplier has to uncrate and set up the cabinets at no additional cost as the supplier has shown by course of his performance during the first four months of the contract that his intention was to uncrate and set up the cabinets.

The procurement process by which a bid is submitted in a sealed envelope to prevent disclosure of its contents before the deadline for the submission of all bids.

A warehouse operated under U.S. Customs supervision to store imported goods.

A method used to calculate inventory turns is to divide the average inventory level into the annual cost of goods.

You can use cycle counts on a cyclic schedule rather than taking physical inventories. The most effective cycle counts are those conducted on a daily basis.

Inventories represent a sizable investment for businesses. The higher the inventory turns, the lower the inventory carrying costs.

Risk of loss passes to the buyer when the goods are delivered at the buyer's plant.

Under the UCC good faith means honesty in fact in the conduct or transactions concerned.

Requirements contracts must be awarded in good faith. In this case, the courts will determine that those contracts were executed in bad faith and neither vendor will be bound by their contract.

A small business which is owned or controlled by a majority of persons, not limited to members of minority groups, who have been deprived of the opportunity to develop and maintain a competitive position in the economy because of social disadvantages.

An unsigned purchase order is valid. The company logo on the purchase order is considered as the signature.

Under this type of contract, a contractor is reimbursed for costs allowed under the contract terms.

The word shall denotes the imperative and the word may denotes the permissive.

The statute of limitations under the UCCC is generally four years. In certain cases, the UCC allows the statute of limitations to be reduced to a one-year minimum.

Purchasing agents have broad implied or apparent authority. The company would be liable for the $50,000 purchase order.

You cannot reject a shipment by just returning it without stating why the shipment is rejected. The UCC states that you must particularize your objections to the goods.

The Uniform Commercial Code (UCC) allows for the award of requirements contracts, which do not state any particular quantity. However, a requirements contract is only valid if the contract is awarded in "good faith." Sellers will normally ask for the contract to have an estimated quantity or a quantity range.