Negotiating for the agreement with suppliers isan imperative step to all ordering. The Irving Company needs tonegotiate on payment terms, quality of goods, delivery time andplacement of the order (ZHANG & LUO, 2007). A good deal must meetall the requirements of for the company. In this case, goodnegotiation deals must address all the objectives of the company andunderstand the position of suppliers. The both side need to concludethe negotiation of feeling satisfied.
The company needs to draw framework agreement,which recognises the goods (cable) that need to be supplied. In thisparticular case, communication cables and Electric cables need to beprovided within the project duration, which last up to 2022. This isthe schedule within which the cables are expected to be delivered inthe agreed amount. The price of the cable is be negotiated afterassurance of good quality of cables. The price negotiation shouldinclude allowable percentage of scrap metals, estimated at 15% andcost of generating and attaching tags (ZHANG & LUO, 2007).Moreover, the value for money including accepted buy tolerance needsto be on agreement. Furthermore, the cost of applying and procuringwrap must be agreed (ZHANG & LUO, 2007).
The terms of payments are important in agreement,which is mostly determined by the cable delivery method and the Racktype is used in MARITIME. The company need to use just- in-timedelivery for the cables and potential supplier must agree on thismethod.The issue of after sale services and maintains has to come inthe arrangement. This may take care the testing and clarification oncertain use of cable. Another life cost such as handling cost for thecable is essential to put into consideration.
The company then needs to do fundamental researchabout the suppliers to understand them better before the firm canadjust the price for the contract duration. The purchasing order needto include pricing adjustment mechanism, details allowing thestreamlined adjustments on the payment and whether the supplier allowit. Then an order would be initiated to start the entire process ofgetting cables from the leading vendor with 12 to 20 weeks.
ZHANG, Q. H.,& LUO, J. W. (2007). Optimal Quantity Discount Policy forPerishable Supply Chain under Asymmetric Information [J]. SystemsEngineering-Theory & Practice, 12,004.