The Supplier Flashcards
What factors affect the choice of a supplier?
Price
Quality
Quantity
Location
Lead time
Reliability
Reputation
Discount available
Credit terms
Price Description
How much the supplier charges for raw materials.
Price Justification
Price needs to be as low as possible in order to maximise profit.
Quality Description
The standard of raw materials sold by the supplier.
Quality Justification
The higher the quality of raw materials, the higher quality the final product should be.
Quantity Decsription
The volume/amount of raw materials the supplier is able to provide.
Quantity Justification
Organisations need access to enough inventory to fulfil large orders and during busier times of the year.
Location Description
Where the supplier is situated in relation to your business.
Location Justification
If the supplier is located further away from you may be charged a higher delivery fee.
Lead Time Description
The time between ordering inventory from your supplier and it arriving.
Lead Time Justification
If inventory takes too long to arrive you may be unable to fulfil customer orders on time.
Reliability Description
Whether your supplier is able to consistently fulfil your order on time without any mistakes.
Reliability Justification
Late deliveries or unsuitable raw materials could delay production which has a knock-on impact to customers.
Reputation Description
The reviews and ratings of your supplier by other businesses.
Reputation Justification
A higher reputation increases the chances that the supplier will fulfil your order consistently.
