For-profit organizations
→ organizations strive to generate a profit (revenue in excess of expenses). These profits
can be reinvested into the company or distributed to owners and/or shareholders.
→
→ take several legal forms such as unincorporated (sole proprietorships or partnerships),...
BUAD 342 EXAM 1 QUESTIONS AND
ANSWERS 2024/2025
For-profit organizations
→ organizations strive to generate a profit (revenue in excess of expenses). These profits
can be reinvested into the company or distributed to owners and/or shareholders.
→
→ take several legal forms such as unincorporated (sole proprietorships or partnerships),
corporations (C Corporations and S Corporations) and limited liability companies (LLC).
Not for Profit organizations
→ organizations strive to provide particular services to constituents (e.g., governments,
educational, or charitable organizations.)
business process
→ is a collection of related activities that combine different resources and inputs to create
an output that is of value to the organization, its stake holders and/or its customers.
These outputs may be products or services.
Business process groupings used by disciplines vary and examples can include:
→ acquiring and paying for resources (e.g. financing, human skills, materials and supplies,
and plant and equipment),
→
→ converting resources acquired into goods and services for customers,
→
→ delivering goods and services to customers and collecting payment.
Some industries group key management activities and refer to them as business processes, such
→ managing the supply chain,
→
→ managing the customer relationship,
→
→ managing the product lifecycle management,
→
→ managing human resources,
→
→ managing financial resources.
typical core business processes that are common across every type of organization:
→ 1. acquiring and paying for resources from a vendor (e.g. acquiring and paying for
financing, human skills, materials and supplies, and/or plant and equipment);
→
→ 2. converting resources acquired into goods and services for customers; and
→
→ 3. delivering goods and services to customers and collecting payment.
Sell "things" - Order to Cash Business Process
→ •Market goods or services to potential or returning customers (and/or perform support
activities that help customers choose the organization as a vendor).
→ •Negotiate (with a potential or returning customer) the terms of a sales order for
goods or services.
→ •Select and inspect goods or services to be delivered to the customer.
→ •Prepare goods or services for delivery to the customer.
→ •Deliver goods or services to the customer.
→ •Receive payment for goods or services from the customer.
→ •Negotiate the terms of, and possibly accept, a customer return of goods.
→ •Identify need and possibly internally request the purchase of goods or services by an
authorized purchasing agent.
→ •Negotiate a purchase order with a vendor.
→ •Receive and inspect goods or services from a vendor.
→ •Store and/or maintain goods.
→ •Pay a vendor for goods or services.
→ •Return goods to a vendor.
source data automation (SDA)
→ collecting data
→ at its point of origin in digital form.
Examples of SDA technologies include
→ ·Magnetic Ink Character Recognition (MICR) (such as those on checks)
→ ·Bar Code Reader/Scanner
→ ·Optical Character Recognition (OCR)
→ ·Magnetic Strip on credit cards
→ ·Credit card chips
→ ·RFID - radio frequency identification devices
→ ·Touch screens
→ ·Voice recognition & other biometrics devices
EDI (Electronic Data Interchange).
→ A set of standards for exchanging messages containing formatted data between
computer applications.
→ 1.(Capturing) and Recording Source Data
→
→ 2.Maintaining Reference Data
→
→ 3.Generating Outputs/ Reports
- Conversion Business Process
→ Make new "things" - to sell using "things" they buy,
→ or customize "things" they buy to get them ready
→ for resale
Procure to Pay ( Procurement or Expenditure) Business Process.
→ includes the activities involved in acquiring, paying for, and maintaining the goods and
services needed by an organization.
During the procure to pay process, the organization takes the role of
→ the purchaser (customer).
An open purchase order is
→ is an order that has been accepted by the vendor, but the goods and/or services have
not yet been received by the purchaser
→
→ -authorizes the purchaser to take delivery of goods or services once they arrive.
Open Purchase Order
→ If the vendor accepts the conditions of the order, then we say that the negotiation has
resulted in
overall objective of the procure to pay process is
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