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a.
Preparing materials request
Requesting, receiving, and selecting vendor bids
Preparing purchase order
Preparing receiving ticket
Matching M/R, R/T, and invoice
Correcting reconciliation differences
Preparing and delivering vendor payment
Total
The two activities that are good candidates for improvement are:
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
Activity Cost Activity Cost Activity Cost
Activity Improvement Improvement (Cost)
Preparing materials request
Requesting, receiving, and selecting vendor bids
Preparing purchase order
Preparing receiving ticket
Matching M/R, R/T, and invoice
Correcting reconciliation differences
Preparing and delivering vendor payment
Total
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
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