Question

Why is the negotiation process critical to purchasing transportation services?

Answer 1

The negotiation process is very critical to purchasing transportation services because

1. It involves more a fixed costs to reach out to final procurement pricing. So, the fixed costs can be negotiated to the least possible stage.

2. The final price involves least of the variable costs, so it is very important to minimise the transportation services price.

3. Various services like logistics, which involves very much intangible elements, like high competitions, organisation of process of transportation,

4. Lead time of inventories can be reduced to lowest level which makes the transportation prices more negotiable.

5. Due to current innovations and development, the learnng curve of transportation costs has been going down which invites for more and more negotiation in transportation prices.

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