For Profit
→ Organizations that strive to generate a profit (revenue in excess of expenses)
Not for Profit
→ Strive to provide particular services to constituents (e.g., governments, educational, or
charitable organizations)
Business Process
→ A collection of related activities that co...
BUAD 342 | UTK | EXAM #1
QUESTIONS AND ANSWERS 2024/2025
For Profit
→ Organizations that strive to generate a profit (revenue in excess of expenses)
Not for Profit
→ Strive to provide particular services to constituents (e.g., governments, educational, or
charitable organizations)
Business Process
→ A collection of related activities that combine different resources and inputs to create
an output that is of value to the organization, it's stake holders and/or its customers.
These outputs may be products or services
Procure to Pay
→ The activities involved in acquiring, paying for, and maintaining the goods and services
needed by an organization (inputs)
Conversion Business Process
→ The activities necessary to convert raw inputs into finished products and services. The
bridge between Procure to Pay and Order to Cash
Order to Cash
→ The sequence of activities that collectively serve to attract and retain customers, help
customers select goods and services, deliver the goods and services requested, and
collect payments for the goods and services
→ Business events that increase or decrease the quantity of a firm's economic (financial)
resources
Decision/Management Events
→ Decisions about managing resources (e.g., human, physical, capital)
Procure to Pay Business Process
→ 1. Identify need and (possibly) internally request the purchase of goods or services by
an authorized purchasing agent
→ 2. Negotiate a purchase order with the vendor
→ 3. Receive and inspect goods or services from a vendor
→ 4. Store or maintain goods
→ 5. Pay a vendor for goods and services
→ 6. Return goods to a vendor
Order to Cash Process
→ The Order to Cash process is the heart of the company's value chain and is typically
the only time the customer directly interacts with the organization.
Order to Cash Business Process
→ 1. Market goods or services to potential or returning customers (and/or perform
support activities that help a customer choose you as a vendor)
→ 2. Negotiate the terms of an order for goods or services
→ 3. Select and inspect goods to be delivered to the customer
→ 4. Prepare goods or services for delivery to the customer
→ 5. Deliver goods or services to the customer
→ 6. Receive payment for goods or services from the customer
→ 7. Negotiate the terms of, and possibly accept, a customer return of goods
Interdependent Business Process
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