The economic principle is "Keep costs as low as possible to maximise profit!"

Assessing and selecting suppliers forms part of the purchasing cycle.

When looking for products, you should always look for the cheapest price.

Capacity refers to the ability of the supplier to supply the right goods at the right quantities.

Semi-finished goods are goods that have been extracted from the primary sector.

Capital goods refers to goods consumed in the business.

Economies of scale refers to the business benefiting due to the size of the operation.

Buying on credit improves the cash flow of the business.

JIT stands for ‘Just in time’.