Supplier Selection And Appraisal Of A Company

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Supplier selection and appraisal Supplier selection is critical for the success of a company Five rights Purchasing cycle The purchasing cycle describes the stages in which a company undergoes when making a purchase, from identifying a need or requirement to obtaining the good at the end. It shows a process of many interrelated tasks that lead to the acquisition of a good. It represents the time that…show more content…
Stage 7 – Pre-screen possible sources – To reduce the number of suppliers it is important to determine what is crucial to the firm and therefore what are desired and demanded, as a desire is negotiable and a demand is not. Therefore the supplier base is reduced to the supplier that can meet the firm’s crucial demands. Stage 8 – Evaluate remaining supplier base – The evaluation considers the users desires now and therefore this is accomplished by negotiation and competitive bidding with the suppliers. Stage 9 – Choose supplier – based on the previous stages the purchaser will identify which supplier they will make relationships with, maybe being strategic alliance or partnerships. Stage 10 – Deliver product/performance service – This is the first point when the firms need might be satisfied by supplier and is the first input of performance data in supplier evaluation. Stage 11 – Postpurchase/ Make performance evaluation – This is when the supplier’s performance is examined and therefore will provide data for future sourcing. (Lysons & Farrington, 2006, Novack, 1991, Novack & Simco, 1991) Strategic Decisions before deciding to select a supplier Make or buy – (393-8) Make or buy is the first fundamental decision that a company has to make at the start of their supplier selection process; it is the decision between developing the good themselves or purchasing it from an external supplier. The factors that produce the definitive decision are both qualitative and
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