"Reduce the supplier base." "Consolidate requirements." "Cut costs." In today's environment, where these comments are the orders of the day, there is a model that establishes and defines logic for purchaser pricing expectations when negotiating a broad supplier alliance. The fact is, suppliers are concerned about the high cost of selling and are generally willing to reduce margins on sales and increase service levels in return for more business volume, particularly where they have some assurance of the volume and their selling cost can be reduced. Still, a purchaser's expectations of improved pricing should be supported by logic and reason.
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