Chapter 12 - The optimal supplier. In this chapter, you should be able to: Determine a buying plan by selecting a single supplier or bid buying, explain additional criteria used when choosing suppliers, describe the relationship between suppliers and buyers, describe the relationship between salespersons and buyers. | The Optimal Supplier 12 The Initial Supplier Survey List all possible suppliers Trim list by establishing a set of criteria Product Lists AP prices Supplier services Location Lead times Purchasing policies Buying Plans Working with one supplier Bid Buying The Fixed Bid Vs. The Daily Bid Fixed bid Used for large quantities of products purchased over a long period of time Typically a formal procedure Request for bid includes specs for bidding process Daily bid Used for fresh items Called “daily quote buying” Selecting a Supplier When Using Bid-Buying Fixed Bid Distribute bid requests to potential suppliers Determine what supplier provides you with the optimal value for a product or a set of products Daily bid Review bid sheets Determine what supplier provides you with the optimal value Other Supplier Selection Criteria Cost-plus purchasing One-stop shopping Stockless purchasing Cash-and-carry Standing orders Use of technology Co-op purchasing Local or national source Other Supplier . | The Optimal Supplier 12 The Initial Supplier Survey List all possible suppliers Trim list by establishing a set of criteria Product Lists AP prices Supplier services Location Lead times Purchasing policies Buying Plans Working with one supplier Bid Buying The Fixed Bid Vs. The Daily Bid Fixed bid Used for large quantities of products purchased over a long period of time Typically a formal procedure Request for bid includes specs for bidding process Daily bid Used for fresh items Called “daily quote buying” Selecting a Supplier When Using Bid-Buying Fixed Bid Distribute bid requests to potential suppliers Determine what supplier provides you with the optimal value for a product or a set of products Daily bid Review bid sheets Determine what supplier provides you with the optimal value Other Supplier Selection Criteria Cost-plus purchasing One-stop shopping Stockless purchasing Cash-and-carry Standing orders Use of technology Co-op purchasing Local or national source Other Supplier Selection Criteria (cont.) Delivery schedule Ordering procedures Credit terms Minimum order requirements Variety of merchandise Other Supplier Selection Criteria (cont.) Lead time Free samples Returns policy Reciprocal buying Willingness to barter Other Supplier Selection Criteria (cont.) Cooperation in bid procedures Size of firm Number of back orders Substitution capability Buyout policy Other Supplier Selection Criteria (cont.) Suppliers facilities Long-term contracts Case price Bonded suppliers Consulting services Deposits required Other Supplier Selection Criteria (cont.) Willingness to sell storage Suppliers who own hospitality operations Socially responsible suppliers references Most Important Selection Criteria Individual buyer preference Product quality usually number one Supplier service is a close second AP price is usually third Supplier-Buyer Relations Supply house officers set the tone of their business They set the overall sales strategies They sponsor product and market research Suppliers train their sales staffs Suppliers keep their salespersons’ promises Suppliers’ Major Activities Set tone of business Determine sales strategies Push Pull Product and market research Sales training Additional Considerations Determine how you will work with salespersons or distributor sales representatives (DSRs) Evaluate suppliers and salespersons Get comfortable in the relationship
