Procurement is finding and buying the goods and services a business needs from suppliers. Procurement includes choosing suppliers and agreeing prices.

Logistics is getting goods from one place to another efficiently. Logistics includes storage, transport and delivery to customers.

A supplier is a business that provides another business with materials, components or services. A café's suppliers include bakeries and coffee roasters.

Why is price a factor in choosing a supplier?

A cheaper supplier lowers the business's costs and can raise profit. The lowest price is not always best if quality or reliability suffers.

Why is quality a factor in choosing a supplier?

Poor-quality materials lead to faulty products and unhappy customers. A business's own quality can only be as good as its supplies.

Why is reliability a factor in choosing a supplier?

A reliable supplier delivers the right goods on time, every time. Unreliable deliveries can halt production and lose sales.

AQA GCSE Business 8132

Business in the Real World

Topic overview What a business is and why people start one Goods, services, needs, wants and factors of production Business sectors, entrepreneurs and a changing business environment Sole traders, partnerships, limited companies and not-for-profit organisations Business aims and objectives Why business objectives differ and change Stakeholders and their influence on businesses Factors affecting business location Business planning and basic financial terms Expanding a business and economies of scale

Influences on Business

Topic overview E-commerce and digital communication Ethics, the environment and sustainability Interest rates, employment and consumer spending Globalisation and exchange rates Employment, health and safety and consumer law Competition, risk and uncertainty

Business Operations

Topic overview Job, flow and lean production Managing stock: just in time and just in case Suppliers, procurement, logistics and supply chains Quality control, quality assurance and TQM Customer service and the sales process

Human Resources

Topic overview Organisational structures, span of control and delegation Recruitment, selection and contracts of employment Financial and non-financial methods of motivation Induction, on-the-job and off-the-job training

Marketing

Topic overview Identifying and satisfying customer needs Market segmentation Purpose of market research and primary and secondary research Market research methods and interpreting findings Pricing methods and factors affecting price New products, USP, brand image and the Boston Matrix Product life cycle and extension strategies Promotional methods and the promotional mix Channels of distribution, e-commerce and m-commerce The integrated marketing mix

Finance

Topic overview Sources of finance Cash flow and cash flow forecasts Financial calculations and average rate of return Break-even charts and margin of safety Income statements and statements of financial position Profit margins and judging financial performance

Business Operations

Suppliers, procurement, logistics and supply chains

3 things to know
Paper 1

Overview

Procurement and logistics, choosing suppliers on price, quality and reliability, lowering unit costs, balancing cost against service, supply chains, and what happens when one link fails.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

What is procurement?

Key term

What is logistics?

Key term

What is a supplier?

Questions from this subtopic

Each one with the model answer underneath.

1
What is procurement?
Model answer
Procurement is finding and buying the goods and services a business needs from suppliers. Procurement includes choosing suppliers and agreeing prices.
2
What is logistics?
Model answer
Logistics is getting goods from one place to another efficiently. Logistics includes storage, transport and delivery to customers.
3
What is a supplier?
Model answer
A supplier is a business that provides another business with materials, components or services. A café's suppliers include bakeries and coffee roasters.
4
Why is price a factor in choosing a supplier?
Model answer
A cheaper supplier lowers the business's costs and can raise profit. The lowest price is not always best if quality or reliability suffers.
5
Why is quality a factor in choosing a supplier?
Model answer
Poor-quality materials lead to faulty products and unhappy customers. A business's own quality can only be as good as its supplies.
6
Why is reliability a factor in choosing a supplier?
Model answer
A reliable supplier delivers the right goods on time, every time. Unreliable deliveries can halt production and lose sales.

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Business in the Real World

Influences on Business

Business Operations

Human Resources

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The pays a fee and a share of revenue.

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AThe business pays more interest on the money it owes.

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