Which of these factors could lead to supplier attrition?a. Financial instabilityb. Favourable termsc. Perfect order deliveryd. No risks
Question
Which of these factors could lead to supplier attrition?
a. Financial instability
b. Favourable terms
c. Perfect order delivery
d. No risks
Solution
The factors that could lead to supplier attrition are:
a. Financial instability: If a supplier is financially unstable, they may not be able to continue supplying goods or services. This could be due to a variety of reasons such as poor cash flow, high levels of debt, or a lack of profitability.
b. Favourable terms: This might seem counterintuitive, but if a supplier is offered very favourable terms by another buyer, they might choose to stop supplying to their current customers. This could happen if the new buyer offers to purchase larger quantities, pay higher prices, or provide better payment terms.
c. Perfect order delivery: This is not likely to lead to supplier attrition. In fact, a supplier that is able to consistently deliver orders perfectly is likely to be very reliable and unlikely to stop supplying.
d. No risks: This is also unlikely to lead to supplier attrition. If a supplier perceives no risks in their relationship with a buyer, they are likely to continue supplying. However, if they perceive high risks (for example, if they believe the buyer might not pay for goods or services), they might choose to stop supplying.
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