Discus cost approaches and techniques

Discus cost approaches and techniques
14.1 To be able to build long-term collaborative relationships with the supplier, the supplier needs to have a sound
financial position. Apart from financial reports, what weak signals would indicate that things are going wrong
with the supplier and that its continuity may be at stake? Give a few examples.
14.2 A supplier of components announces that it has to raise its prices by 10 per cent because it has lost a major customer. It states that it is now forced to spread its fixed cost across a smaller production volume. What costing
method does this supplier use? Assuming that this supplier is important to you, how would you deal with the supplier’s request? What steps would you take?
Discus cost approaches and techniques
14.3 In this chapter, vendor rating was named as one of the methods that can be used to measure supplier performance. Delivery reliability and quality performance of the supplier are two aspects of vendor rating. How can
a supplier’s delivery reliability and quality performance be measured in a practical way? What KPIs would you
suggest?
14.4 Last year you purchased 100 units of product X from a supplier at €50.00 each. You estimate that you will purchase 300 units of this product from the same supplier this year. You are now preparing for the price discussion
with the supplier. What price are you willing to pay, assuming that an 80 per cent learning curve applies to this
product?
14.5 Name examples of products for which the price is set by means of cost-based pricing, market-based pricing and
competitive bidding. Which arguments will the buyer use in each of these cases to obtain the lowest possible purchase price?
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