ABSTRACT
This chapter discusses vendor selection process and verification of vendor cost. The process of selecting a vendor involves multiple steps. These steps are described as follows: analysis of business requirements, conducting a comprehensive search for a suitable vendor, request for proposal and request for quotation, evaluation of the proposal and selection of the vendor, and strategies to negotiate a contract. The chapter addresses the process of verifying a vendor's cost through an analytical process. Modern manufacturers rely on third party vendors and suppliers to supply them with the parts and subassemblies that go into the final product. The bill of materials (BOM) is an engineering document that lists all the parts required for a product. A bill of materials can be depicted in the form of a tree or a table. The tree is a graphical illustration of the bill of materials. Typically though, the bill of materials is depicted in a tabular format.
