choosing a supplier

• when choosing a supplier businesses need to consider the factors that can impact their operations and profitability
• businesses should consider these when choosing a supplier

  • price
  • location/ transport costs
  • lead time
  • product quality
  • discount and trade credit offered
  • ability to supply on time
• price -

  the price charged by a supplier directly effects the production costs of a company. Comparing different costs allows a business to find the best price that suits them. if the raw materials are cheaper it means the company can charge a lower price for their product, attracting more customers.
• Location/ Transport costs

   Choosing a supplier located nearby can reduce transportation expenses and ensure timely delivery, especially for perishable goods. If the supplier if further away it will impact the transport and delivery costs.
• lead time

  The lead time refers to the time taken between placing an order and receiving it. depending on how quickly the business wants their supplies delivered will help decide which supplier to choose.
• product quality -

  The quality of raw materials directly influences the quality of the finished product. Poor quality products leads to reduced customer satisfaction sales and lower profit. Opting for a supplier that provides high-quality materials helps maintain product standards and reduces waste during production
• discount or trade credit offers

  Trade discounts for regular orders make the cost of raw materials cheaper which lowers cost of production. Trade credit allows the business a period of time without having to pay for purchases, which can help with cash flow.
• ability to supply on time

  businesses want a supplier who will consistently deliver on time, this will help keep operations running smooth. if supplies are not being delivered on time it can cause hold ups in production and lead to loss of sales