Answer
The three factors causing reductions in the cost to place purchase orders for materials are:
1. Long-Term Purchasing Agreements: Companies establish extended purchasing agreements with suppliers, defining price and quality terms over a longer period. This reduces the frequency of order placements and associated costs.
2. Electronic Ordering: Companies leverage electronic platforms, such as the Internet, to place purchase orders. This streamlines the process, reduces paperwork, and minimizes manual effort.
3. Purchase-Order Cards: Increasing use of purchase-order cards simplifies the ordering process and reduces administrative costs.
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