Question: When a contractor has won a contract with a client, they in most cases have to give an extra discount on the initial price that
When a contractor has won a contract with a client, they in most cases have to give an extra discount on the initial price that was offered to the client. This discount usually reduces their already thin profit margin to a bare minimum. Given the fact that procurement in general makes up more than 70 per cent of a project’s price, management puts pressure on its buyers to obtain lower prices from their suppliers and subcontractors as ‘procurement needs to secure the profit of the project’. Do you agree with such an attitude towards suppliers? What would you consider the most important risks related to dealing with suppliers in this way?
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