Consider the purchase of a can of soda at a convenience store. Describe the various stages in the supply chain and the different flows involved.
The stages in a supply chain are normally the supplier, the manufacturer, the distributor, the retailer, and finally the customer.
The first stage of the supply chain is the supplier. Initially, the supplier provides the material necessary for the production of the soda can to the manufacturer, who had previously passed an order for the material. When the material is passed from the supplier to the manufacturer, money is passed from the manufacturer to the supplier. Here, there was a flow of money, information, and material. After this, the distributer passes information to the manufacturer who in turn makes the product and delivers it in return for money. Again, we have a flow of money, information, and the product.
Now let’s go back to the retailer sold the soda can to the customer. In order for the retailer to get the soda can, he had to order it from the distributor. In this stage of the supply chain the product is passed from the distributor to the retailer, and money and information is passed from the retailer to the distributor.
A customer purchasing a can of soda at a convenience store shows the end of the supply chain, which is the fulfilling of the customer request. The flow occurring with this purchase is the can going to the customer and the money and information going to the retailer that sold the soda can to the customer.
Why should a firm like Dell take into account total supply chain profitability when making decisions?
The objective of any supply chain is to be able to maximize the supply chain surplus, which is the difference between what the value of the final product is to the customer and the costs the supply chain incurs in filling the customer request. Total supply chain profitability is the difference between revenue generated from the customer and the overall...
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