The process of selecting the best source for a commodity or service is a critical function of the purchasing or acquisitions department. For most common items, the purchasing office maintains a list of approved, qualified suppliers. For new items or for items without a qualified supplier, the purchasing office must conduct a decision analysis.
Part of maintaining a supplier database includes preparing reviews and supplier scorecards. Decision analysis models can be used to choose potential suppliers, as deciding on the right mix of suppliers and how orders will be allocated is an important aspect of supplier selection. Supplier selection may be limited to a sole source for some critical or proprietary components.