U2 AOS1 KK3 Choosing Appropriate Suppliers Flashcards
In addition to the resource needs of the business, what are six other factors that businesses need to take into account when choosing appropriate suppliers?
Quality
Timeliness
Competitiveness
Innovation
Finance
CSR
Why is the quality of supplies an important factor to consider?
B/c it will impact the overall quality of the end product.
Higher quality products = less defects and returns, greater customer satisfaction, and increased sales.
Why is it important to have reliable suppliers that can deliver supplies on time?
So that the business can create its own products using the supplies in a timely manner and keep customers happy and satisfied.
Unreliable suppliers can result in reduced/slowed production, having to make product lines or menu items unavailable.
This will negatively impact the reputation of the business.
Why is it important to deal with suppliers whose products are competitively priced?
Competitively priced supplies means that businesses can offer their own finished products at lower prices to their customers, which in turn can increase the competitiveness and profitability of their business.
Why is it important to deal with suppliers that are innovative?
Having established relationships with innovative suppliers will mean that the business is well placed to take advantage of these innovations as they arise.
This can enable the business to gain a competitive advantage as a result.
Why is it important to deal with suppliers that will provide trade credit (an account)?
Having an account with your supplier allows you to postpone debt.
This means you can use the supplies to generate revenue and cash flow before the supplies have to be paid for.
Why is it important to deal with suppliers who are socially responsible?
Dealing with suppliers who are socially responsible can help to build your business reputation by association and shared values.
Conversely, dealing with suppliers who are not socially responsible (damage the environment, treat employees poorly for example) can negatively impact your business’ reputation due to the connection you have with that business.
