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110 CHAPTER 4 The Procurement Process

Figure 4-20: Communicating with vendors

Figure 4-21 shows the various options related to the purchase order step.
To summarize, a company creates a purchase order using a variety of source
documents (or none) and user inputs and then communicates it either to an
external vendor or to another plant in the company via one of several com-
munication tools.

Figure 4-21: Purchase order processing options

In our example, the purchase requisition created in the previous step is
used as the source document to create a purchase order for 500 t-shirts. The
ERP system automatically selects Spy Gear as the vendor from the source list
and utilizes the purchasing info record to determine the gross price of $15 per
t-shirt. Thus, the total cost indicated on the purchase order is $7,500.

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