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Need For Effective Vendor Selection & Rating In An Organization
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1.8 DEFINITION OF TERMS
(1) LEAD TIME: It is not only the
possibility of lead time can itself be a factor in deciding order
quantity. The length of lead time can itself be a factor in deciding
order quantity for instance, it may be feasible to order a week’s supply
at a time of some regular requirement on a one-week lead time, but it
would be unreasonable to do this on a fifty-week lead time, with fifty
small order for the one item outstanding at any one time.
(2) MINIMUM
ORDER QUANTITY: This is a process by which the inventory is not allowed
to fall below this level. In order words, it supply men the minimum
amount of stock that should be allowed in the store.
(3) LABOUTR
RELATION; This is very importance factor the buying company to take into
account. If labour discontent exists, the buyer’s company could
investigate the supplier’s wage structures and suggest ways of
improvement.
(4) QUANTITY: it is not just to accept to make. The
question is, can the company meet capacity or engage in mass
manufacturing so as to reduce cost throughout economic production. When
quantity is too small for economic production, it is world wide to buy
such a component.
(5) QUANTITY CONTROL: It is necessary to have the
assurance of quality control and supervision when the process of
fabricating the component are performed. The desire to certain quality
is very important.
(6) VENDOR SOURCES: It also very important, a good
supplier has well-developed sources or raw materials and components
that will ensure continuity of production during periods of fluctuating
business conditions.
(7) SOCIETAL CONCERNS: The extent to which a
vendor is evaluated in terms of it’s employment, abatement policies, and
resource conservation is the most controversial and subjective aspect
of vendor selection decisions.
(8) LOCATION OF THE SOURCE: It is very
important to know where the source is located. The distance will help
the buyer adjust lead time and prepare for transportation cost. It will
also help the buyer to identify the nearest branch or depots if they
exist.
(9) INVENTORIY TURNOVER RATIO: This ratio is the cost of goods
sold divided by the average inventory. It indicates the degree of
efficiency in inventory management and the freshness and salability of
the inventory. If the ratio is low the firm is either over-inventionized
or undersold.
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ABSRACT - [ Total Page(s): 1 ]This study is a survey on the need for effective of vendor selection and
rating of some Nigeria companies, a case study of Nestle Food Nigeria
Plc.The study is aimed at identifying, assessing and analyzing the
various available methods of selecting suppliers in purchasing
department, for the best of store keeping and material handling.The study also includes the examination of roles of sales strategies and improvement on the prospect.Primary
data was collected by the means of questionn ... Continue reading---
