CHAPTER 1 HW Solutions
Why should a firm like Dell take into account total supply chain profitability when making decisions? Their success rely on competitive advantage. If Dell was to view supply chain operations as a zero sum game, they would lose their competitive edge as their suppliers’ businesses struggled. Dell’s profit gained at the expense of their supply chain partners would be short lived. Just as a physical chain is only as strong as its weakest link, the supply chain can be successful only if all members cooperate and focus on a global optimum rather than many local optima. 3
What are some strategic planning and operational decisions that must be made by an apparel retailer like The Gap? As The Gap plans supply chain strategy it must first consider the marketing function’s pricing plans in order to structure a supply chain consonant with these plans. Strategic considerations such as the capacity of each supplier and assembly operations, sourcing decisions and how logistics are to be handled are all part of the design. The supply chain must also settle on communication channels and frequencies. Supply chain planning takes the strategic decisions as a given and seeks to exploit efficiencies in the chain to maximize supply chain surplus. The entire chain should collaborate in forecasting and planning production as to achieve a global optimum. The forecasts should take into account planned promotions and known seasonal fluctuations in demand. 6
In what way do supply chain flows affect the success or failure of a firm like Amazon? List two supply chain decisions that have a significant impact on supply chain profitability. The success or failure of a company like Amazon is decided by the effective function of its supply chain. The flow of products from publishers to distributors to customers must be rapid and reliable in order to satisfy customers. The flow of information back through the supply chain allows all members to coordinate efforts. The...
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