Choosing Suppliers (AQA GCSE Business)

Revision Note

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Factors Affecting the Choice of Suppliers

  • Businesses often go to great lengths to find suitable suppliers of raw materials and components

    • Factors including the price, quality and reliability of supplies determine whether a business can efficiently produce high-quality products at a reasonable cost

  • There are several factors that can influence the supplier chosen by a business

A range of factors, including price, quality and reliability impact on the choice of suppliers

A range of factors, including price, quality and reliability impact on the choice of suppliers

Factors that Influence the Choice of Suppliers


Factor


Explanation

Quality

  • If raw materials or components are poor quality, then the final product may not meet the desired standards

    • E.g. A construction company needs high-quality steel to ensure the structural integrity of a building.

Delivery

  • Stocks need to be delivered on time, at a reasonable cost, and in a reliable manner

  • This is particularly important for businesses operating just in time manufacturing

    • E.g. A car manufacturer must have components delivered on time to avoid delays in production

Availability

  • Businesses need to ensure that the raw materials they need are readily available (this is different to delivery on time)

  • E.g. Tesla uses cobalt in their batteries and needs to ensure they have a steady supply of this rare earth metal

Price

  • Businesses look to get the best possible price for raw materials and components without sacrificing quality

  • E.g. A textile manufacturer needs to source cotton at the lowest possible price to remain competitive in the market

Relationships with suppliers

  • Businesses often choose to work with reliable suppliers who can deliver quality materials on time and at a reasonable cost

  • E.g. A construction company places orders with trusted suppliers to ensure that their materials meet safety standards

Examiner Tip

A common misconception is that businesses always focus on the price charged by suppliers for stock. While price is important, as it determines the amount of added value in the manufacturing process, other factors can be equally important. Especially if factors such as the speed to get a product to market or customers' quality expectations are crucial.

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