Suppliers Flashcards
What are suppliers?
Suppliers are companies that provide goods or services that a company or business requires producing its products or achieving its aims.
What factors may effect a business’s choice of supplier?
Price
Location and transport costs
Lead time
Product quality
Reliability
Reputation
Describe the price factor
The price of supplies has a direct effect on how much it costs the company to produce a product. If a company can find a cheaper supplier it could lead to increased profit
Describe the location and transport cost factor
The price of delivery will be lower or higher depending on location. If the supplied product is perishable a business may require a supplier which is close to it.
Describe the lead time factor
Lead time is the amount of time between an order being placed and order being received. Some companies need quick delivery time as they may be using stock control methods like JIT
Describe the product quality factor
The quality of raw materials has a direct effect on the quality of the finished product. Businesses will need to source high standard supplies or it may effect customer satisfaction.
Describe the reliability factor
The supplier needs to deliver materials at the agreed time or it can affect the business’s ability to deliver the product to customers
Describe the reputation factor
If a supplier has a bad reputation companies may hesitate to rely on them to deliver high quality materials on time.
What are the factors a business needs to consider when choosing a supplier?
– Does the supplier offer discounts
- Does the supplier offer trade credit?
- are there any additional changes?
- Can the supplier deliver on time?
- Are the supplier’s prices competitive?
- Is the supplier able to supply the quantity needed?
- Are the supplier’s goods of an acceptable quality?
