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A trade item is a good or service that can be purchased through a supply chain process. Evaluation is important to determine if it meets needs and is cost-effective. Once approved, an order is placed with the vendor and payment is made according to the invoice terms.
A trade item is any type of good or service that can be considered for purchase and ultimately ordered through a supply chain process. Items of this type are usually evaluated in advance using information provided by the manufacturer or retailer and then ordered by the customer. Typically, the payment process for a trade item involves issuing an invoice that provides terms of payment, allowing the customer to take possession of the item and pay for it within those terms.
Evaluating a trade item or items for potential purchase is an important part of the supply chain management process. The evaluation usually begins with the use of information previously provided by sellers or other sources to help managers and purchasing agents determine whether the item would indeed provide an effective and cost-effective means of meeting a current need or want. Part of the process often involves comparing the features of the trade item to similar products available from other sources and deciding whether the item is the best possible purchase in terms of quality and price.
If the results of the evaluation determine that the trade item is the best possible choice, arrangements are made to place an order with the vendor or vendor. In most supply chain strategies, this usually requires creating a formal requisition that is forwarded to a purchasing agent, who in turn approves the order and assigns an order number. At that point, the order can be placed with the supplier, with the specification that the order number appear on the final invoice. Once the trade item is received and accepted by the customer, the invoice is scheduled for payment, usually in accordance with the company’s accounts payable procedures and allowing for the terms associated with the invoice.
In the broadest sense, a trade item is any type of product or service offered for sale or trade, even items purchased for cash. Using this broad application, this means that even products purchased from an office supply store for use in the commercial enterprise would be considered a commercial item, since presumably the customer has compared the product to similar offerings, found the quality and price acceptable. and decided to start shopping. This broader definition is common in many areas of the world and is often used interchangeably with executing virtually any type of sale of a good or service.
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