4.4c - Suppliers Flashcards
Supplier definition
A business that provides goods and services to another business
Strategic working relationship definition
One in which both companies get long-term benefits from working together
How can a business build a strategic working relationship with their suppliers?
- Linked networks (shared IT systems so both can view stock levels)
- JIT systems
- Shared costs (sharing specialist equipment)
- Innovation (share new idea)
Why are suppliers important?
- They determine many costs of a business
- They are closely linked to product quality
- They can provide trade credit
What factors should be considered when choosing a supplier?
- Price
- Payment terms
- Quality
- Capacity
- Reliability
- Flexibility
Payment terms definition
The arrangements made about the timings of payment and any other conditions agreed between buyer and seller
Trade credit definition
When a business buys goods and services from a supplier and pays for them later
Strategic suppliers definition
Suppliers which the business cannot succeed without maintaining an effective relationship with
Commodity suppliers definition
Suppliers which provide goods and services that can easily be bought elsewhere
