Question: In designing the procurement process, it is important to consider the goods that the process will be used to purchase. Direct Materials and Indirect Materials

In designing the procurement process, it is important to consider the goods that the process will be used to purchase. Direct Materials and Indirect Materials are the 2 main categories of purchased goods within any company. Direct materials are components used to make finished goods while Indirect materials are goods used to support the operations of a firm. Which of the following statements is CORRECT about Direct Materials and Indirect Materials? 1. The main focus of the indirect materials procurement process is the reduction of transaction costs per order. 2. Memory, hard drives, and CD drives are indirect materials for a personal computer manufacturer. 3. Personal computers are indirect materials for an automotive manufacturer. 4. For indirect materials, the consolidation of spending with a supplier often allows the firm to negotiate better purchasing discounts. 5. Direct materials should be available in the right place, in the right quantity, and at the right time for production. 6. Only the procurement process of indirect materials requires aggregation of orders by product and supplier. 7. Transaction costs for indirect materials are higher than that for direct materials. A.1,3,4,5,6 C.1,2,6,7 B.2,4,5,7 D.1,2,3,4,7
In designing the procurement process, it is

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