Final answer:
The process by which paper documents are bypassed in favor of direct computer-to-computer communication for business transactions is known as Electronic Data Interchange (EDI). The correct option is 1.
Step-by-step explanation:
A process that bypasses paper documents because the computers of the customer communicate directly with the computers of suppliers to automate routine business transactions is called Electronic Data Interchange (EDI). This process enables companies to exchange business documents in a standardized electronic format, streamlining procurement and sales activities.
Traditional methods such as phone, fax, and mail are replaced with an efficient, fast, and accurate electronic system. It has particularly revolutionized sectors such as manufacturing, where supply chains depend on timely and accurate exchange of orders, invoices, and shipping notices. With the progress of technology in telecommunications, as well as computerized typesetting and printing, the role of EDI has become even more significant in enabling companies to manage long-distance economic connections more efficiently and with lower costs.