SayPro Reduce the supplier’s risks.

If a company is well placed to help a supplier reduce its price risks, it can demand some concessions in return. For instance, a large chemical company was working with a single, recalcitrant supplier. To produce titanium dioxide it required feedstock manufactured to tight specifications, and only that supplier could meet its needs. When the chemical company tried to increase its order, the supplier claimed to have limited capacity and demanded a price premium.Given the cyclical nature of the industry, the company surmised that the supplier would jump at the chance to lock in a long-term contract—a commitment other customers lacked the financial strength to make. Procurement worked closely with a team from finance, which created detailed models to determine a price range that would let the supplier generate returns of 15% on invested capital. The supplier agreed to a multiyear contract with prices that would not fluctuate more than 10% annually, and the chemical company got a 10% discount from the original quote.Please visit our website at www.saypro.online Email: info@saypro.online Email: info@saypro.online Call: + 27 11 071 1903 WhatsApp: + 27 84 313 7407. Comment below for any questions and feedback. For SayPro Courses, SayPro Jobs, SayPro Community Development, SayPro Products, SayPro Services, SayPro Consulting, and SayPro Advisory visit our website to www.saypro.online