Supply Requirement (1. Briefly explain the key issues in supple chain? (…
1. Briefly explain the key issues in supple chain?
Distribution network configuration
This issue deal with the design of a distribution network to serve a specific market. This will consists of a set of warehouses and retail outlets, together with the manufacturing plant and supply sources, based on consideration of location and capacity of each of these elements.
Concerned with design of the product and its impact on total cost of the product.
Concerned with the distrubution of the firm's products.
The key issue is the definition of customer value in an age of increasing consuner power.
Supply Integrated and strategic partnering
Concerned with the complex issue of strategic inter organizational partnership for achieving competitive advantage.
In traditional supply chain strategies, each party in the chain focuses on its own profit and hence makes decisions with little regard to their impact on other supply chain partners.
This is corncerned with the levels of inventory to be held at various points in the supply chain.
Information Technology and Decision - Support Systems
Critical enabler of effective supply chain management. Indeed, much of current interest in supply chain management is motivated by the oppurtunities that appeared due to the abundance of data and the savings that can be achieved by sophidsticate analysis of these data
2. Discuss the drivers of risk in supply requirement?
High capacity utilization at supply source
Inflexibility of supply source
Information infrastructure breakdown
Extensive system networking
:red_flag: Natural disaster
:red_flag: Labor dispute
Inaccurate forecasts due to long lead times, seasonality, product variety, short lofe cycle.
3. What is bullwhip effect? Is it good or bad in logistics? Explain your answer.
The bullwhip effect is the phenomenon of orders and inventories getting progressively larger (more variable) moving backwards through the supply chain
Manufacturers would like to produce in large lot sizes because it is more cost effective to do so. The problem, however, is that producing in large lots does not allow for flexibility in terms of product mix.
:check: Retailers find benefits in ordering large lots such as quantity discounts and more than enough safety stock.
:check: The downside is that ordering/producing large lots can result in large inventories of products that are currently not in demand while being out of stock for items that are in demand.
Ordering/producing in large lots can also increase the safety stock of suppliers and its corresponding carrying cost. It can also create what's called the bullwhip effect.