2.34 Procurement

What does a business want from its suppliers?

  1. Quality – it wants the best quality products at the best possible price
  2. Delivery – if a business is running a JIT method of delivery it is important that this is reliable
  3. Availability – a business must be confident that its suppliers can deliver stock, otherwise production may come to a stop
  4. Costs – setting up supply deals can be expensive, so both parties will want the relationship to be long lasting
  5. Trust – a business needs to be able to trust its suppliers, this can be achieved through reliable deliveries and open communication when solving problems

If there are any problems with these elements, it could have a negative impact on the business – think about the consequences i.e. what might the impact be on meeting customer demands, sales, revenue, profit, reputation etc.

Click here to answer exam questions on this topic.

Now try answering this question:

Discuss the points that a small business owner should consider when choosing its suppliers (6)

Remember, a ‘discuss’ question is like 2 ‘explain’ questions – try and add a 3rd connective to each paragraph if you can e.g.

One point is that…

This means that… (1st connective)

As a result… (2nd connective)

Consequently… (3rd connective)

Another point is that…

This means that… (1st connective)

As a result… (2nd connective)

Consequently… (3rd connective)