NHM 373 Final Exam questions with
100% correct answers 2025/2026
Ordering Process Overview - correct answer ✔✔Takes place when a need is identified and the
buyer commits to a specific purchase and a supplier; can be formal or informal; involves a series
of activities; procedures and process must be pre-developed/established to ensure purchasing
goals are achieved; internal needs must be communicated to the buyer
What must be communicated internally prior to placing an order? - correct answer ✔✔-Exactly
what products must be purchased
-Quality requirements
-Which products from which approved vendor
-Quantity needed
-Coordination amongst departments, and staff
It is always the ________ responsibility to know and to tel the supplier exactly what is needed -
correct answer ✔✔purchasers
What must be communicated externally when placing an order? - correct answer ✔✔"RFPs"
from vendor; any problems with the order, product, or service
Request for Proposal (RFP) - correct answer ✔✔equating information from several suppliers to
determine who you should order from in order to maintain the highest quality with low costs;
request for proposal on price quotation from approved vendors
Common ordering challenges - correct answer ✔✔-quality problems
-backorders
,-change in quantities or purchase unit sizes
-on site shortages
-storage capacities
-coordination between receiving, production/service, vendors, and purchasers
What is the ordering process like for a centralized organization? - correct answer
✔✔Department managers makes needs known (requisition form) to a purchasing department
who either orders the items and issues that might be in storage
What is the ordering process like for a decentralized organization? - correct answer ✔✔every
department orders the products needed for their specific department
Basic steps in the ordering process - correct answer ✔✔1. needs are identified
2. requests made
3. items issued (if available and on hand)
4. RFP's requested (it items not on hand)
5. Select pre-approved vendor - order placed (if items not on hand)
6. Items received from vendor
7. items issued to requesting department or moved to storage
8. payment made when due
Commonly used documents in the purchasing process - correct answer ✔✔purchase
requisition, purchase order, request for proposal, invoice, credit memo
purchasing requisition - correct answer ✔✔issue requisition and purchase requisition; internal
document to make needs known
,purchase order - correct answer ✔✔used to inform vendor that prices are acceptable and order
is placed; there are typically multiple copies of this document
Invoice - correct answer ✔✔document accompanying deliveries; contains payment info and
much of the same info on the purchase order; multiple copies
Credit memo - correct answer ✔✔document used to adjust the invoice (payment) for delivery
mistakes/shortages
Formal styles of purchasing - correct answer ✔✔competitive bidding, requires formal contract
between supplier and buyer; most institutions enter a formal purchasing method; ex - bid
buying
Bid buying - correct answer ✔✔a number of suppliers compete over price quote on buyers
specs (price quotation) using a "Bid Request Form"
Types of bids - correct answer ✔✔fixed bids, daily bids, line item bidding, bottom line bidding
Fixed Bids - correct answer ✔✔used for large quantity over a long period of time (usually
nonperishable items); suppliers prefer to avoid long-term contracts because prices can go up
over time
Why don't suppliers like long term fixed bids? - correct answer ✔✔because of price changes
over time
Daily bids (Quotation buying) - correct answer ✔✔used for perishable items; usually called in by
the telephone and followed by written confirmation before acceptance; "market price"
Line item bidding - correct answer ✔✔each supplier bids on each product on the list; lowest
price receive order for that product; very time consuming
, Bottom line bidding (all or nothing) - correct answer ✔✔suppliers bid best price on complete
lists of items; usually used by fed, state, local institutions
Disadvantage of line item vs bottom line bidding? - correct answer ✔✔receiving - multiple
deliveries for line item, same delivery for bottom line
How Is bidding done? - correct answer ✔✔bids are solicited with specs and closing date; bids
are submitted, sealed unmarked envelope; lowest bidder is awarded the contract
Info required when requesting for bids - correct answer ✔✔-delivery requirements
-payment terms
-products with specs
-pricing protection required
-sample invoice
-effective dates of contract
-addition of items
-means of assuring program compliance
Advantages of bid purchasing - correct answer ✔✔1. Lower prices
2. Consistent quality assurance
3. Reduced paperwork
4. Reduced labor cost
Vendor contracts - correct answer ✔✔written agreement between buyer and vendor that
defines the responsibilities of both parties over a specified period of time; legally enforceable if
all conditions/agreements aren't met; oral agreements can be enforced by the courts
100% correct answers 2025/2026
Ordering Process Overview - correct answer ✔✔Takes place when a need is identified and the
buyer commits to a specific purchase and a supplier; can be formal or informal; involves a series
of activities; procedures and process must be pre-developed/established to ensure purchasing
goals are achieved; internal needs must be communicated to the buyer
What must be communicated internally prior to placing an order? - correct answer ✔✔-Exactly
what products must be purchased
-Quality requirements
-Which products from which approved vendor
-Quantity needed
-Coordination amongst departments, and staff
It is always the ________ responsibility to know and to tel the supplier exactly what is needed -
correct answer ✔✔purchasers
What must be communicated externally when placing an order? - correct answer ✔✔"RFPs"
from vendor; any problems with the order, product, or service
Request for Proposal (RFP) - correct answer ✔✔equating information from several suppliers to
determine who you should order from in order to maintain the highest quality with low costs;
request for proposal on price quotation from approved vendors
Common ordering challenges - correct answer ✔✔-quality problems
-backorders
,-change in quantities or purchase unit sizes
-on site shortages
-storage capacities
-coordination between receiving, production/service, vendors, and purchasers
What is the ordering process like for a centralized organization? - correct answer
✔✔Department managers makes needs known (requisition form) to a purchasing department
who either orders the items and issues that might be in storage
What is the ordering process like for a decentralized organization? - correct answer ✔✔every
department orders the products needed for their specific department
Basic steps in the ordering process - correct answer ✔✔1. needs are identified
2. requests made
3. items issued (if available and on hand)
4. RFP's requested (it items not on hand)
5. Select pre-approved vendor - order placed (if items not on hand)
6. Items received from vendor
7. items issued to requesting department or moved to storage
8. payment made when due
Commonly used documents in the purchasing process - correct answer ✔✔purchase
requisition, purchase order, request for proposal, invoice, credit memo
purchasing requisition - correct answer ✔✔issue requisition and purchase requisition; internal
document to make needs known
,purchase order - correct answer ✔✔used to inform vendor that prices are acceptable and order
is placed; there are typically multiple copies of this document
Invoice - correct answer ✔✔document accompanying deliveries; contains payment info and
much of the same info on the purchase order; multiple copies
Credit memo - correct answer ✔✔document used to adjust the invoice (payment) for delivery
mistakes/shortages
Formal styles of purchasing - correct answer ✔✔competitive bidding, requires formal contract
between supplier and buyer; most institutions enter a formal purchasing method; ex - bid
buying
Bid buying - correct answer ✔✔a number of suppliers compete over price quote on buyers
specs (price quotation) using a "Bid Request Form"
Types of bids - correct answer ✔✔fixed bids, daily bids, line item bidding, bottom line bidding
Fixed Bids - correct answer ✔✔used for large quantity over a long period of time (usually
nonperishable items); suppliers prefer to avoid long-term contracts because prices can go up
over time
Why don't suppliers like long term fixed bids? - correct answer ✔✔because of price changes
over time
Daily bids (Quotation buying) - correct answer ✔✔used for perishable items; usually called in by
the telephone and followed by written confirmation before acceptance; "market price"
Line item bidding - correct answer ✔✔each supplier bids on each product on the list; lowest
price receive order for that product; very time consuming
, Bottom line bidding (all or nothing) - correct answer ✔✔suppliers bid best price on complete
lists of items; usually used by fed, state, local institutions
Disadvantage of line item vs bottom line bidding? - correct answer ✔✔receiving - multiple
deliveries for line item, same delivery for bottom line
How Is bidding done? - correct answer ✔✔bids are solicited with specs and closing date; bids
are submitted, sealed unmarked envelope; lowest bidder is awarded the contract
Info required when requesting for bids - correct answer ✔✔-delivery requirements
-payment terms
-products with specs
-pricing protection required
-sample invoice
-effective dates of contract
-addition of items
-means of assuring program compliance
Advantages of bid purchasing - correct answer ✔✔1. Lower prices
2. Consistent quality assurance
3. Reduced paperwork
4. Reduced labor cost
Vendor contracts - correct answer ✔✔written agreement between buyer and vendor that
defines the responsibilities of both parties over a specified period of time; legally enforceable if
all conditions/agreements aren't met; oral agreements can be enforced by the courts
