Supplier selection is based on which criteria?

Supplier selection is based on which criteria?

• A. Cost
• B. Quality
• C. Capacity
• D. All of the above

Answer: (D)

Supplier selection relies on evaluating multiple criteria that influence ongoing performance, not just price. Cost matters because it drives the total cost of ownership, including not just the unit price but sourcing, handling, and any quality-related costs. Quality matters because defects and poor quality lead to rework, returns, delays, and unhappy customers. Capacity matters because a supplier must be able to meet your current and future volumes reliably, avoiding shortages or last‑minute expediting. Because each of these areas addresses a different risk and requirement, the best choice is to consider all of them together, often using a weighted scoring approach to balance cost, quality, and capacity. In practice other factors like delivery reliability, financial stability, and risk may also be included, but the core idea is that supplier selection should weigh multiple important criteria, not just one.

Supplier selection relies on evaluating multiple criteria that influence ongoing performance, not just price. Cost matters because it drives the total cost of ownership, including not just the unit price but sourcing, handling, and any quality-related costs. Quality matters because defects and poor quality lead to rework, returns, delays, and unhappy customers. Capacity matters because a supplier must be able to meet your current and future volumes reliably, avoiding shortages or last‑minute expediting. Because each of these areas addresses a different risk and requirement, the best choice is to consider all of them together, often using a weighted scoring approach to balance cost, quality, and capacity. In practice other factors like delivery reliability, financial stability, and risk may also be included, but the core idea is that supplier selection should weigh multiple important criteria, not just one.