Chat with AIExam 5: Price and the Vendor
What is a "hedging"?
(26) 
VerifiedHedging is a contract on a future price. Purchasers use hedging to maintain a fixed price for a product or commodity they will need. The benefit of hedging is that you avoid the risk of increasing prices. Hedging is a common practice. It enables the company to pay a stable contract price for a future product irrespective of future market prices. Hedging is advantageous if you, as the purchaser, can determine how much product will be required based on the product's history, and if you can safely assume that prices will increase.
What does a purchasing manager or purchaser do after the purchase contract is signed with a vendor?
(41) VerifiedAfter the purchase contract is signed, the manager, receiving clerk, and purchaser should continue to track prices on every invoice. They should monitor that all specifications, quality, services, and prices are met. The purpose of watching these specifications is to be sure that the vendor is living up to its end of the contract. In some cases, the contract may allow for periodic review of progress by both parties. This is a good time to resolve variances from established specifications and delivery standards, if any, along with any other unforeseen issues or changes.
The disadvantages to standing orders may be:
(36) VerifiedD
"Hedging" does not refer to the practice of ordering excess items to guard against running out of a popular menu item
(34) The analysis of base month prices and future product prices will reveal the cost impacts of price changes by delineating the difference between vendors. This analysis is called:
(32) It is vitally important to consider all the variables involved in selecting your vendor because once the contract has been negotiated, your attention can then be directed to other activities.
(33) One of the best ways to ensure that you are in compliance with regulations regarding food safety is to visit and inspect your vendor's premises unannounced.
(46) You may unilaterally adjust payment of a bill to your vendor based on discrepancies in quality or quantity on a delivered order.
(39) Purchasers use this type of pricing to maintain a fixed price for a product or commodity they will need in the future. This is called a:
(32) "Cost plus" pricing has the benefit of avoiding the price increases your vendor experiences.
(34) Considerations before awarding business to a vendor include:
(29) As a basic principle of purchasing, you should always choose the least price for the best quality available.
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