4.Sources of Buying Flashcards

1
Q

What are the two types of buying and selling?

A

Domestic and International

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2
Q

What are the 5 aids to trade?

A

communication
transport
insurance
banking
warehousing

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3
Q

What is commerce?

A

Commerce is all the activities dealing with bringing goods and services to consumers.

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4
Q

What are the advantages of buying from a supplier at home? 4

A

Low transaction costs
easy communication with low barriers
Shorter lead
More support

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5
Q

What are the disadvantages of buying from suppliers at home? 4

A

Might lose better opportunities
Limited choice
may be less efficient with economies of scale
Inability to benefit from competitive prices.

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6
Q

What are the advantages of buying from foreign suppliers? 4

A

Cheaper options
wider choice
access to high-quality products
access to developed technologies and research

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7
Q

What are the disadvantages of buying from foreign suppliers? 4

A
  • Complex documentation process
    differences in legal procedures
  • hidden costs
  • longer delivery time
  • communication barriers
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8
Q

What are the advantages of buying directly from suppliers? 4

A

Reduce costs through the removal of intermediaries
Better relationship with the supplier to maintain uniformity in quality
Flexible arrangments
Clear communication channels

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9
Q

What are the disadvantages of buying directly from suppliers? 3

A

Relying on few suppliers is risky
Reduced availability of choices
Not suitable for low-volume orders

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10
Q

What are the advantages of buying through intermediaries? 3

A

A wider range of choice
Reduced transport costs as one distributor may offer a range of products
arranged transport at low or no cost

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11
Q

What are the disadvantages of buying through intermediaries? 4

A

Higher price due to markup
may not be suitable for high-volume orders
lack of knowledge of products
less control over products

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12
Q

What are the advantages of buying through mail order? 3

A

Lower prices through low overhead costs
greater choice
convenient when done digitally

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13
Q

What are the disadvantages of buying through mail order? 4

A

There may not be credit purchase options
inconvenient return options
lack of personal contact
goods ordered may not stand up to the expectations when delivered

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14
Q

What is outsourcing?

A

arranging an external party to carry out work for a business

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15
Q

Advantages of outsourcing? 3

A

Lower cost
Increased capacities
Superior quality

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16
Q

Disadvantages of outsourcing? 3

A

Loss of control
Reliance on suppliers
Disagreement with employees