Describe two techniques used in vendor rating stating their advantages and disadvantages

Describe two techniques used in vendor rating stating their advantages and disadvantages

1.Subjective / Qualitative supplier rating method:
A purchasing officer is appointed to observe on how well or badly the suppliers are performing and then judge each supplier. It is subjective because different individuals have different value judgments.

Advantages:
1. It is cheap to carry out as only one observer is used and there are no records kept.
2. Is a good method to eliminate obvious short comings.

Disadvantages
1. Not factual therefore personal likes and dislikes may be used by the observer.
2. Not accurate
3. It is susceptible to bribery thus the company may receive low quality items
4. No records are kept in case they may be needed for future reference.

2.Qualitative / Objective supplier rating method:
Marks are allotted to each of the factors that determine a good supplier each time a supplier
performs. These factors include: Right price, right time, right quality, right quantity, service given to the buyer, cost reduction effort, management capability.
The marks are the compiled at the end of a given period and used to come up with a conclusion in respect to each supplier.

Advantages:
1. The method is more accurate than subjective.
2. Avoids complaints / disputes as it is based on facts
3. Minimizes incidences of bribery
4. Ensures high quality goods are delivered.
5. Reference in form of records is kept in case the procurement / purchasing officer leaves office.

Disadvantages:
1. Record keeping can be expensive.
2. The method is time consuming.

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Titany answered the question on November 25, 2021 at 05:48

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