The aim of vendor rating is to establish a procedure by which quality control. procurement and user departments can fulfil the corporate objective better by obtaining quality products at the minimum or the right cost. It should be kept in mind that just as the buyer rates a vendor, the vendor also has a rating system for the buyer. He also assesses the buyer in terms of quickness of payments, adherence to contractual obligations, etc. It should be appreciated that the concept of vendor rating has no meaning if only one vendor exists.
Furthermore, the time and cost spent in appraisal should be related to the importance and perceived level of impact that the efforts would have in terms of costs or levels of service in a particular item.
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