Name and define the two distinct types of procurements firms make. Explain the difference between the two.

The two types of procurements that firms make are for direct goods and indirect goods.

Direct goods are directly involved in the production process such as the sheet steel used to produce an automobile body. Indirect goods are all other goods that are needed to carry out the production process but are not directly involved in creating the end product. They include office supplies and maintenance products, which are often called MRO (maintenance, repair, and operations) goods.



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