In the majority of cases, the establishment of a fair and reasonable price for the desired level of quality becomes the principal focus of the negotiation process. This aspect of negotiation ranges in complexity from the use of price analysis to the more complex analysis of the potential supplier's cost elements. While the buyer focuses on obtaining a fair and reasonable price, this must be done within the context of obtaining the lowest total cost.
On-Time Performance
The ability to meet delivery schedules for the quality and quantity specified is the single greatest supplier failure encountered in purchasing operations. This results primarily from: (1) failure of the requisitioners to submit their purchase requests early enough to allow for necessary purchasing and manufacturing lead times, and (2) failure of buyers to plan the delivery phase of negotiations properly. Because unrealistic delivery schedules reduce competition, increase prices, and jeopardize quality, it is important that buyers negotiate delivery schedules which suppliers can realistically meet, without endangering the other requirements of the purchase.