Question

in a global evonomy does geographic location of suppliers matter? Explain

Answer 1

Global Economy

Global Economy is the term which economy of the people for the exchange of goods and services all over the world. Global Economy is the combination of two words one is Global which means World and Economy are meant the production and exchnage of goods and services. So combine the meaning of the Global Economy means production and exchange of goods and services within the World.

Example: International Business, FDI(Foreign Direct Investments, MNCs etc.

Geographical Location of Supplier

Yes, the Geographical Location of Supplier matters for the business. Every business wants to identify their buyer and Location is the most important factor for selecting the buyer. Every Busines wants that their supplier would be near to them, it does not only help to deliver the goods quickly but also support any issue and queries. Some of the key point of the location which matters while selecting suppliers.

1. Home Country of Supplier

Home Country of supplier means from where the supplier belongs if the supplier belongs to the enemy country for the buyer country then it becomes difficult to trade with this supplier. That's disturbing the supplying of Goods as well as the business of the buyer.

2. Distance between Supplier and Busienss(buyer)

Far distance between the business and supplier becomes difficult for the timely delivery and quick response to the customer. So it's better if the supplier is nearest to the business location for better connectivity and for timely response to the buyer queries.

3. Trasportation Cost

High Transportation cost will lead to an increase the cost of the product and service which directly impact the cost of the product as well as company profit. Which becomes difficult for the business for long-run survival.

4. Goverment Policy

The Government policy is also critical for selecting the location as if the supplier belongs to that location, where our government imposes high duties on imports, in another country with our government rebates us to import. So we carefully analyze the Government Policy towards that supplier location which helps us for longer stability and development.

5. Lead Time of Supplier

Lead time is the time used by the supplier to provide the goods after receiving an order from the buyer. Lead Time is the difference between two-time initiation Time and completion time. that help us to understand the speed of the supplier. Time is an important factor in every business. So before selecting any supplier, we need to carefully analyze the lead Time of it.

In short, we can say that the supplier location is the most critical and important factor for the business. The above points help us to find the best supplier for our business organizations.

All the best, have a great day