Criteria for choosing a supplier | Entrepreneurship and Business Management N4 Past exam Papers

Criteria for choosing a supplier

QUESTION

Refer to your business plan and give the criteria you used in finding a supplier for your business.

List Potential Suppliers:

In our quest to find the ideal suppliers for Confort Furniture, we embarked on extensive research across various channels. We scoured online directories, attended relevant trade shows, and meticulously examined industry publications to identify potential suppliers. Our aim was to cast a wide net, considering both local and international suppliers to ensure we had a comprehensive pool of options to evaluate.

List Products and Services:

To establish a comprehensive inventory for Confort Furniture, we meticulously compiled a detailed list of the furniture pieces and materials essential for our business operations. This encompassed everything from luxurious sofas and ergonomic chairs to sturdy tables, along with a diverse range of fabrics and high-quality woods. By mapping out our product requirements with precision, we aimed to ensure that our chosen suppliers could fulfill all our needs effectively.

List the Purchase Price:

With our product requirements clearly delineated, we proceeded to gather price quotes from each potential supplier. Our goal was to obtain comprehensive pricing information encompassing the cost of each item, as well as any associated fees such as shipping or handling charges. By diligently comparing purchase prices across different suppliers, we aimed to identify the most cost-effective options without compromising on quality.

List Conditions of Sale Evaluation for Each Product/Supplier:

As we delved deeper into the supplier evaluation process, we scrutinized each potential supplier based on a comprehensive set of criteria. Key factors included the quality of their products, assessed through sample inspections and facility visits, as well as their ability to meet our lead time requirements for production and delivery. Additionally, we carefully reviewed the payment terms proposed by each supplier, assessing factors such as discounts for early payment and penalties for late payment. Moreover, we placed significant emphasis on the responsiveness and professionalism of each supplier’s customer service team, recognizing the importance of effective communication in fostering a successful partnership. Environmental sustainability also weighed heavily in our evaluation, with preference given to suppliers who demonstrated a commitment to eco-friendly practices throughout their operations.

Decide on Supplier:

Armed with a wealth of information gathered through our rigorous evaluation process, we were well-positioned to make an informed decision on selecting our suppliers. After carefully weighing the strengths and weaknesses of each candidate against our predefined criteria, we ultimately chose the supplier that best aligned with our values and business objectives. By prioritizing factors such as quality, price competitiveness, reliability, and sustainability, we aimed to forge long-term partnerships that would underpin the success and growth of Confort Furniture.

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Illustrated Notes

Steps/Criteria for choosing a supplier

1. List Potential Suppliers:
   • Research online directories, trade shows, and industry publications to identify potential suppliers.
   • Consider both local and international suppliers to compare options.
2. List Products and Services:
   • Compile a list of the furniture pieces and materials you need for your business, including sofas, chairs, tables, fabrics, woods, etc.
3. List the Purchase Price:
   • Gather price quotes from each potential supplier for the products and materials you require.
   • Consider factors such as bulk discounts, shipping costs, and any additional fees.
4. List Conditions of Sale Evaluation for Each Product/Supplier:
   • Quality: Evaluate the quality of the products offered by each supplier. Request samples or visit their manufacturing facilities if possible.
   • Lead Time: Consider the production and delivery lead times for each supplier to ensure they can meet your inventory needs.
   • Payment Terms: Review the payment terms offered by each supplier, including any discounts for early payment or penalties for late payment.
   • Customer Service: Assess the responsiveness and professionalism of each supplier’s customer service team.
   • Warranty/Guarantee: Inquire about warranties or guarantees offered on the products supplied by each supplier.
   • Environmental Sustainability: Consider the sustainability practices of each supplier, including their sourcing of materials and manufacturing processes.
5. Decide on Supplier:
   • After evaluating each potential supplier based on the criteria above, select the supplier that best meets your needs and offers the best combination of quality, price, and service.
   • Consider establishing long-term relationships with reliable suppliers who can grow and adapt with your business.