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The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market - Literature review Example

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"Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market" paper states that the net price offered by the supplier may take precedence over other considerations or that oil companies may simply employ suppliers who are able to provide them with credit…
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The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market
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Download file to see previous pages It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would place more emphasis on a supplier that is quick and ensures speedy delivery. On the other hand, in the case of an industry like the automobiles industry, the suppliers would be valued for the lower costs and high-quality wares (Christopher, 2000). Also, other factors like governmental, legal and environmental regulations, market competitiveness, etc. would play a role in the supplier selection process (Vonderembse and Tracey, 1999). Organizations employ several different supplier selection criteria as per their needs or as per the assumed utility of the selection criteria. The supplier selection criteria used by the firm has a notable impact on its performance (Vonderembse and Tracey, 1999).

Owing to the importance of selecting the right supplier, organizations and academics have invested considerable time and resources in exploring the various vendor selection methods and in evaluating their effectiveness under a given set of circumstances (Christopher, 2000). Since the 1960s, there is seen a considerable amount of research done on how to analyze the criteria for selection and measuring the performance of suppliers (Christopher, 2000). Over the years, the supplier selection process has gained complexity with the requirements placed by globalization, financial risks, and a highly competitive business environment. ...Download file to see next pagesRead More
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