A manufacturer of refrigerated display cabinets for South African supermarkets uses a specialised temperature-control unit that is critical to product performance. Only two qualified suppliers can produce the unit, and recent failures have caused costly warranty claims. One supplier offers a small price reduction if the buyer commits immediately, but refuses to discuss process yields, warranty causes, or design changes. What should procurement do before awarding the next contract?

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Answer

Request standard catalogue pricing from both suppliers and award the order to the lowest quoted supplier.

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Use a detailed cost and performance review to identify cost drivers before agreeing to future supply terms.

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Accept the lower price because the item has limited supplier availability and immediate savings are available.

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Treat the item as a low-value purchase and reduce administrative effort through automated ordering.

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A manufacturer of refrigerated display cabinets for South African supermarkets u...

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