Purchasing function is supported by product engineering drawings and specifications, quality-control documents, and testing activities that evaluate the purchased items. Buyers perform purchasing function who is responsible for the sale of and profit margins on merchandise that will be resold.
Step includes training, engineering and production help, and data transfer assistance.
The contract price is then based on time and materials or on fixed cost with potential to increase costs as vendors costs increase. Final pre-packed parts sent to customer from distribution center. The distributor assembles, tests, and ships. Units are paid for by the purchasing organization without formal request by the supplier.