Final answer:
An organization forms long-term relationships with dedicated suppliers to encourage design innovation and technological expertise, which can result in better quality products and services. These partnerships also provide stability and enable better long-term planning and investment in growth. A good reputation fostered by reliable suppliers can also result in repeat business.
Step-by-step explanation:
An organization might strive to form long-term relationships with a few dedicated suppliers for several strategic reasons. A key reason is that long-term collaborations can foster a commitment to quality and service reliability. Suppliers involved in such relationships are more likely to invest in providing design innovations and technological expertise that benefit both parties. Instead of focusing on short-term gains by constantly seeking the lowest quotes, these partnerships can lead to improvements in production processes, product quality, and even joint development of new products.
Long-term supplier relationships can also help stabilize the supply chain and allow for better planning and investment in expansion efforts. While in the short run, it can be costly and difficult to add capacity, over a longer horizon, the organization and its dedicated suppliers can plan and execute growth strategies, such as building new factories or expanding existing ones. Additionally, firms with good reputations are more likely to retain repeat customers, which reinforces the value of having dependable suppliers.