It is a type of set using your forearms rather than your fingertips. You basically just bump the ball with a little more force than a regular bump pass, so the hitter can adjust easier. Typically the bump set is used when the setter doesn't have enough time to get their hands under the ball, and has to use their forearms instead.
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The purpose of a bump is to pass it to the setter so that she/he can set it to the hitter. However, it may be used differently; for example, if the setter bump-sets.
That technique is the best one to use because if you do that, then it makes it harder for the other team to receive the ball and hopefully helps you to make plenty of points.
Bump, to control the other sides hit.
Set, to set up the ball for a hitter to hit.
Spike/hit/kill, is to get points.
But mainly to win.