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As a purchasing manager for a manufacturer of domestic appliances you are to source the door seal for a new model of microwave oven. The component has caused problems in the past but the design problems have now been overcome. The market has been increasingly competitive and any problems with the new model could be disastrous. Preliminary sourcing indicates that permaseal Ltd has a substantially lower price than the other potential suppliers, including your current supplier Thermalbond Ltd. However, the last time you did business with permaseal was six years and at the time you experienced some quality and delivery problems.
Explain in detail how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.
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So, would you consider diversification in commodity quality a good business strategy to survive different business cycles?
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