Homework Solutions for week 1
CHAPTER 1: LOGISTICS AND THE SUPPLY CHAIN
2. Distinguish between possession, form, time, and place utility.
Possession utility refers to the value or usefulness that comes from a customer being able to take possession of a product and can be influenced by the relevant payment terms. Form utility refers to a product's being in a form that (1) can be used by the customer and (2) is of value to the customer. Time utility refers to having products available when they are needed by customers while place utility refers to having products available where they are needed by customers.
CHAPTER 2: THE SUPPLY CHAIN MANAGEMENT CONCEPT
4. Why do contemporary supply chains need to be fast and agile?
First, "fast" encompasses a time/speed component, while "agile" focuses on an organization's ability to respond to changes in demand with respect to volume and variety. Fast and agile are important attributes of contemporary supply chains in part because customer needs and wants can change relatively quickly. Failure to be fast and agile can result in decreased market share, reduced profitability, lower stock price, and/or dissatisfied customers for supply chain participants.
8. Discuss some of the ways that inventory can be reduced in the supply chain.
Ways to reduce inventory in the supply chain include, but are not limited to, smaller, more frequent orders; the use of premium transportation; demand-pull (think of Dell Computers), as opposed to supply-push, replenishment; the elimination or consolidation of slower-moving products.w
CHAPTER 9: INVENTORY MANAGEMENT
5. Distinguish between a fixed order quantity and fixed order interval system. Which one generally requires more safety stock? Why?
In a fixed order quantity system, the order size stays constant (although the time interval between orders may vary); in a fixed order interval system, the time interval is constant (although the order size...