Chapter 12, Problem 5DQ

Explanation of Solution

Decision of the Organization:

In order to decide to whom, the organization should send RFPs (Request For Proposal) or RFQs (Request For Quote), the organizations do a due diligence process on potential suppliers based on the following aspects:

• Technical Capability
  • The organizations assess whether the supplier has the technical capability in terms of machinery, technology, quality standards that are deployed to produce the product or service.
• Operational Capability
  • This looks into the availability of specialised and qualified operators and operation staff in place to produce the required product or service.
• Financial Capability
  • The organizations check how financially sound the supplier or service provider is in supplying the product or service...