The vendor price file must be kept up to date so that the automated inventory restocking processes can create accurate purchase orders. Keeping the vendor price file up to date involves updating pricing information, removing unsatisfactory vendors, adding new vendors, and updating lead times.
Vendors price books can be used to supply the current pricing information. The report Receiving Analysis by Vendor provides information for evaluating vendor performance. The report displays average, minimum, and maximum shipping times for each vendor and product. These times can be used to update the lead time in the vendor price file. The figures showing number of back orders, orders on time, units returned, and units defective give useful information about a vendors reliability.