Answer to Question #180976 in Macroeconomics for shaun

Question

Q.2.3 The concentration of purchases from one or a limited number of suppliers may be beneficial to the firm under certain circumstances. List any five of these circumstances and discuss how Dell benefits by using Indian call centres

Answer 1

Circumstances of a firm benefiting from concentration of purchases from one or limited suppliers.

(1) When a firm wants to lower its inventory cost because the supplier makes frequent deliveries of small amounts,thus inventory cost is lowered.

(2) In case the firm wants to access new know how( technology)

(3) If the firm needs to improve the quality of the products due to short delivery time .

(4) When a firm wants to facilitate efficiency in its administration- bulk purchase orders reduces paperwork.

(5) If the firm wish to establish creditworthiness from its suppliers.

Dell has increase its customer satisfaction because of reliable customer services and improved technical support.The firm commitment to to become one-stop shop service has make the firm more trusted by its customer thus increasing its sales.