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In: Operations Management

Explain why don’t companies seek full partnerships with all of their suppliers?

Explain why don’t companies seek full partnerships with all of their suppliers?

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Expert Solution

Full partnership is the relationship with supplier that has close working relations, mutual respect, trust and highly integrated operations. Most of the companies do not seek full partnership with suppliers due to following reasons:

1. Buyers do not want to share the company’s information with supplier as the information may get leaked in the market

2. The company does not want to compromise with quality and price of the product. There may be a case where company gets a same quality product at competitive price.

3. There may be many vendors selling same product, hence bargaining power of the company is high. In this case, company will try to maintain relationship with one or more suppliers.

4. The company does not want to depend on one supplier. There is a possibility where supplier can get bankrupt and the company is left with no other choice of supplier. Hence, the company should always try to maintain relationship with one or more supplier to remain competitive in the market.

keosha answered 6 months ago
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