Here are few considerations to choose supplier. Price - The supplier should give

Question

Here are few considerations to choose supplier.

Price- The supplier should give the stock with proper margin. Low merging and high cost price will affect the profitability of the company. The company can offer some discounts if the good margin is given.

Service- The service should be excellent. Let suppose you are a manager in a FMCG retail outlet. You have 1000kg of sugar in stock. A customer came who has marriage of his daughter and demanded 1000kg sugar. Now you sold that sugar to him. Now you do not have the stock to sell to customers. Here a good service will play a significant role. The stock delivery should be very fast and as per requirement.

Quality- The products should be packed labeled, dusting etc properly.

Capability-   The supplier should be capable to offer you stock Let us have the same example of that retail outlet. Suppose you have given the supplier purchase order worth $10,000 and it is not capable to deliver and can offer only $7000 STOCK. You will lose huge sale and customer satisfaction as well.

Consistency- The vendor should be very consistent when it comes to service, cost, product quality etc.

2nd Answer

There are 3 types of relationship between buyers and sellers.

1.Transactional Relationship

2.Value Added Relationship

3.Collaborative/Partnering Relationship

You have asked to explain 3rd one-

Collaborative/Partnering Relationship- In this type of relation the focus is on building a relation which should be social and economic service. And purpose is to lower the cost and increase value so that both can get their benefits.

In these type of relationships there are two important factors

The first one is Trust and second is commitment.

Here are some advantages of this relationship-

Explanation / Answer

1. List considerations in Choosing Suppliers.

2. Explain the relationship between buyer and seller : Collaboration, confrontation, partnership.

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