In Tenders almost all decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Tenders generally involves making buying decisions under conditions of scarcity. If good data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.
An important distinction is made between analysis without risk and those with risk. Where risk is involved, either in the costs or the benefits, the concept of expected value may be employed. Based on the consumption purposes of the acquired goods and services, Tendering activities are often split into two distinct categories. The first category in tenders are being direct, production-related tender and the second being indirect, non-production-related tender or contracts.
Direct tender occurs in manufacturing settings only. It encompasses all items that are part of finished products, such as raw material, components and parts. Direct tender, which is the focus in supply chain management, directly affects the production process of manufacturing firms. In contrast, indirect tender tendering activities concern “operating resources” that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardised low value items like office supplies and machine lubricants to complex and costly products and services like heavy equipment and consulting services.
Tender by tendering involve bidding process i.e, Tendering. A company may want to purchase a given product or service. If the cost for that product/service is over the threshold that has been established (eg: Company X policy: "any product/service desired that is over Rs.10,000 requires a bidding process"), depending on policy or legal requirements, Company X is required to state the product/service desired and make the contract open to the bidding process. Company X may have ten submitters that state the cost of the product/service they are willing to provide. Then, Company X will usually select the lowest bidder. If the lowest bidder is deemed incompetent to provide the desired product/service, Company X will then select the submitter who has the next best price, and is competent to provide the product/service. (relating to advertising the contract, the actual process etc).
Tenders life cycle in modern businesses usually consists of seven steps:
* Information gathering: If the potential customer does not already have an established relationship with sales/ marketing functions of suppliers of needed products and services (P/S), it is necessary to search for suppliers who can satisfy the requirements.
* Supplier contact: When one or more suitable suppliers have been identified, request for quotation, requests for proposal, request for information, and request for tender may be advertised, or direct contact may be made with the suppliers.
* Background review: References for product/service quality are consulted, and any requirements for follow-up services including installation, maintenance, and warranty are investigated. Samples of the P/S being considered may be examined, or trials undertaken.
* Negotiation: Negotiation are undertaken, and price, availability, and customization possibilities are established. Delivery schedules are negotiated, and a contract to acquire the P/S is completed.
* Fulfillment: Supplier preparation, Expediting, shipment, delivery, and payment for the P/S are completed, based on contract terms. Installation and training may also be included.
* Consumption, maintenance, and disposal: During this phase, the company evaluates the performance of the P/S and any accompanying service support, as they are consumed.
* Renewal: When the P/S has been consumed and/or disposed of, the contract expires, or the product or service is to be re-ordered, company experience with the P/S is reviewed. If the P/S is to be re-ordered, the company determines whether to consider other suppliers or to continue with the same supplier.
Tenders In India are issued by MES, DEFENCE,ONGC, BSNL,BHEL, POWER GRID CORPORATION, PUBLIC WORKS DEPARTMENTS, CORPORATIOINS, STATE GOVERNMENTS, BANKS and PUBLIC SECTOR UNITS. There are tender issued by Private corporate like RELIANCE, ADANI, GVK POWER, PRIVATE BANKS etc apart from co-operative federations, society and Trusts.
Article Source: https://www.bharatbhasha.com
Article Url: https://www.bharatbhasha.com/finance-and-business.php/278218
Article Added on Friday, January 14, 2011
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