Many companies now seek to establish long-term commitments to a small number of favoured suppliers rather than select suppliers through open competitive tendering. As material costs frequently represent a large proportion of total costs for manufacturers, procurement decisions are often critically important and may be taken at head office level to optimise the company's global procurement policy rather than be delegated to operational levels. The financial appraisal therefore provides a starting point for proper evaluation of a decision, rather than a definitive answer.