ADDYFAHMI

CHAPTER 5

Question 1:

Define "direct materials" and "indirect materials". List reasons for a large company having two separate departments to manage the purchasing of each.

Answer:

Direct Material - the raw materials used in the creation of the final product. Direct material is a direct cost and includes any raw material that ends up as a part of the final product.

Indirect Material - any material that is not part of the finished product or used to make the product. Cleaning products are an indirect material cost. 

Company need to keep different item seperately because direct materials are related to the creation and sale of the goods or service, While indirect materials are related to manufacturing of items: however, these are not used in the production of the goods. Most indirect materials department are considered a drain on profits.

Q2: In about 200 words, describe the reasons a buyer might have for wanting to participate in an industry consortium marketplace instead of setting up its own private company marketplace.

with the industry consortium, it can operate as a way to enable distribution of news and probably related products industry. By choosing to allow the consortium to create a real or virtual market that vendors can use to display their goods, and that buyers can visit to buy whatever products they choose. At other times, change is a way that allows the sellerthat is somehow related to communicate with the buyers in a more casual environment. Aprime example of a public exchange of this type is known as the exchange, the farmers asituation where farmers can purchase display space to grow their crops, and sell a variety of fruits and vegetables to customers who visit the site of the market.