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  1st proposal: to accept the increase of the 7%.

  2nd

 proposal: to accept 3.5 % of the price increase

  3rd

 proposal: don't accept the 7 %increase in the price.

1st proposal: to accept the

increase of the 7% in price .

  Estimated issues : 

  it is an essential product that is supplied with the Best quality in the market along with

limitation of other competition (monopolistic market ).

  It is a complementary product that the 7% increase wont affect much the price of the final

product. 

  Establish good business relationship with the new mgt that will benefit me in the future. 

  Economical changes due to 

A- rise in taxes ,inflation& exchange rates

B- rules imposed by labor unions to increase salaries so they are trying to compensate it with the

increase in the price . 

Needed information

  Whether my segment market will accept this increase or not .  

  Can the company afford this increase or not. 

  Get more information about the competitors to be sure that there is no other substitute

supplier. 

  Is it really an essential product or it’s a complementary one . 

  Whether the company is interested to establish this kind of long term relationship or not with

the new mgt. 

  Updated with the new issued taxes rules that is imposed on this industry.  

  Updated with currency exchange rates if the supplier is importing some of his materials. 

  Whether the company is interested to establish this kind of long term relationship or not with

the new mgt. 

  Updated with the new issued taxes rules that is imposed on this industry.  

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  Updated with currency exchange rates if the supplier is importing some of his materials. 

Sources of information.

  Company afford it or not from mkting & financial dep. 

  Get info from central bank ,tax authorities, Regarding rise in taxes, exchange rates or general

rise in prices due to inflation rates . 

  Review labor laws regarding % of in crease in salaries …..etc.

  Regarding acceptance of my customers , get trials results from mkting department & know

from the involved parties in the company if they are interested to establish long term

relationship of this supplier. 

  Knowing from the production dep. Whether it is an essential or complementary product & its

prices from purchaser dep. 

  Get information about the competitors from the market, internet or commercial chambers. 

2nd

 proposal: Is to accept 3.5 % of the price increase in exchange of :

A- free delivery terms.

B- increasing the volume of the order .

C-offering him services in return of 3.5% discount.

D-the supplier company offers me credit terms.

Estimated issues :

  The supplier company payment policy is to pay in cash they don’t offer credit terms. 

  Increase of raw material prices. 

  New strategy of the supplier according to new management so they are seeking for new

clients' category that are more profitable

  may be it is just a trick from the new mgt to get higher profit so ill accept a slight increase. 

  Expansion of the supplier‘s factory so they need to offset extra expenditure by the price

increase. 

Needed information

  Whether my segment market will accept this increase or not .

  Can the company afford this increase or not.

  Info about raw materials price increase if it is imported or local made.

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  Information about the new mgt strategies from old connections if they are looking for new

customers category ,offering developed products with lower prices ,making mkting campaigns

to increase their market share or to change their segment market or targeting new segments or

they are just bluffing to get extra profit from us.

  Cost of transportation in my company & in the suppliers company ,whether they use theirown trucks or they rent it . 

  Information about the capacity of production in case of increasing the volume , whether I

have enough storage area for this extra inventory , whether there is enough spaces in the

stores they offer my product. 

  Offering services as constructing or equipping part of the suppliers factory in case of

expansion , info how much these kind of services will cost me & compare between the prices

of these services & the 3.5% discount which is higher . 

  Comparisons made by finance& accounting dep between the three alternatives .to calculatewhich four will be more profitable for the company. 

  Info from all the dep. Involved in choosing one of the four alternatives. 

  Availability of the credit terms from the supplier.

Sources of information.

  All departments involved in evaluating the three alternatives. 

  Cost of transportation from trucks rent companies . 

  Affording the transportation cost from financial dep or logistics dep. 

  Getting any Inner information from the supplier companies about new strategies or

transportation costs …. from old employees whom I have good relationship with. 

  If the factory is expanding or making new branches I can know it from commercial register.

3rd

 proposal: don't accept the 7 % increase in the price.

  Estimated issues 

  it’s a complementary product where I can buy from any other supplier.

  Our customer won’t accept any increase in our product prices as we don’t offer any credit

terms. 

  Our company can’t afford the 7% increase as it is an essential product that is used in huge

quantities & we are suffering from shortage in liquid money. 

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  They are just bluffing to get extra profit so if I approve on this increase now they ‘ll do it every

year . 

Needed information

  Is it essential or complementary. 

  Info about other available competitors inside & outside the country. 

  Whether the company can offer credit terms to our customers or not.  

  Reviewing sales patterns & % of cash flow to solve the problem of liquidity for example to

deal with more suppliers that offers credit terms. 

  Whether the company can increase the % of sales by new mkting campaigns that can

overcome any increases in the raw material prices in the future. 

  Getting info about the new mgt strategies.

Sources of information.

  Regarding acceptance of my customers , get trials results from mkting department & know

from them if they are interested to establish long term relationship of this supplier. 

  Knowing from the production dep. Whether it is an essential or complementary product. 

  Get information about the competitors from the market, internet or commercial chambers. 

  complementary or not from production dep. 

  Info about competitors from market, internet ,agencies, commercial chamber…etc. 

  Availability of credit terms from accounting & financial department. 

  Finally all information related to sales from sales& mkting dep.