Influences in choice of suppliers:
Costs
-cheaper costs means high profit margins or more competitive prices.
-larger the business,more able to negotiate lower prices.
-lower the cost,high the gross profits
Quality
-there is likely to be a trade off between price and quality
-low price but poor quality,there is likely to be operations issues,reducing customer satisfaction
Payment terms
-This relates to the timing of payments and whether credit is offered
-Credit can improve cash flow as goods can be sold before payment
-Payment is delayed so interest can be charger by supplier
Capacity
-Does the supplier have the capacity to deliver the order?
-if unique component of product,then cant use a different supplier
Reliability
-Arrive on time
-Failures can lead to delays in production and lost orders
-using JIT, frequent delivery is key eg local may be better
Flexibility
-For some businesses,its key that suppliers can cope with varying orders
-Fast moving industries will need suppliers that can adapt to change
Ethical
-is the supplier ethical
