Chapter 4 study questions Flashcards
A typical procurement process starts with the creation of a purchase order
False
If the valuation level is set at the plant level, the same material can have different prices at different plants and can be valued differently for each plant.
True
Once a _______ is set to a vendor, it becomes a binding commitment to purchase the specified materials from the vendor under the stated terms.
Purchase Order
Which of the following enterprise structures are specific to the procurement process?
Plant
Material valuation level/area
Storage location
A plant cannot be a _______.
Product
If a company elects the plant as the material valuation level, material price, and valuation for materials must be the same for all plants within a company code.
False
A purchasing group does not have the legal authority to enter into procurement transactions.
True
From a business standpoint, purchasing or sourcing can be done at the ______ levels
Enterprise
Company code
Plant
The enterprise structure elements associated with the procurement processes include:
Purchasing organizations
Purchasing groups
Valuation area
Which detail is generally not included in the Purchase Requisition
Price
A purchasing organization has the legal authority to enter into procurement transactions.
True
A purchasing group is not assigned to any other organizational level.
True
For cross company code or enterprise level, _____ Purchasing Organization is assigned to _____ plants, and ____ company code.
1-M-0
Properly sequence the basic procurement process from start to finish.
Purchase Requisition
Purchase Order
Goods Receipt
Invoice Verification
Vendor payment
Valuation area must be set to the storage location level in order to use the production planning component and/or the costing component.
False
