What factors are crucial in selecting a supplier?

In the context of selecting a supplier, the factors of cost, capability, and compliance with regulations form a foundational approach to ensuring that the supplier can meet the organization's needs effectively.

Cost is significant because it directly impacts the organization's budget and profitability. A supplier that offers the best value for money can enhance an organization’s competitive edge. Capability refers to the supplier's ability to meet the production and quality demands of the buyer. A supplier needs not only to provide goods or services but also to do so in a way that fulfills the specified requirements and standards. Lastly, compliance with regulations ensures that the supplier adheres to relevant laws and standards, which mitigates risk for the buying organization and ensures ethical and legal procurement practices.

While the other combinations of factors also address vital aspects of supplier selection, they may not cover the essential compliance aspect, which is critical in regulated industries, or they may focus more on qualitative factors without including cost efficiency directly. Hence, the chosen factors are a comprehensive mix that balances economic, qualitative, and regulatory considerations essential in making informed supplier selections.