4.4c Suppliers

Question 1

Supplier definition

Answer 1

Business or individual that provides goods and services to another business

Question 2

Suppliers are important because

Answer 2

1. They determine many costs of a business
2. They are closely linked to product quality
3. They can provide trade credit

Question 3

Payment terms definition

Answer 3

The arrangements made about the timing of payment

Question 4

Trade credit definition

Answer 4

Where a business buys goods and services from a supplier and pays for them later

Question 5

Strategic suppliers definition

Answer 5

Suppliers that the business cannot succeed without maintaining effective relationships with

Question 6

Commodity suppliers

Answer 6

Suppliers that provide goods and services that can easily be bought elsewhere

Question 7

What is a strategic working relationship?

Answer 7

One in which both companies get long-term benefits from working together

Question 8

Ways for businesses to build strategic working relationships with their suppliers:

Answer 8

• Linked networks
• JIT systems
• Shared costs
• Innovation

Question 9

Factors to consider when choosing a supplier:

Answer 9

• Price
• Payment terms
• Quality
• Capacity
• Reliability
• Flexibility