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College of Business Administration
BUSI 3322 – Supply chain Management
HW # 1
Note: The HW should be submitted either as a hard copy or through Backboard
(Digital Box). (2 Marks)
1. 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. (Page - 20)
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There are five basic stages and 3 main flow in supply chain :
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2. Why should a firm like Dell take into account total supply chain profitability
when making decisions? (Page - 20)
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Their success depends on competitive advantage. If Dell was to treat 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. Give arguments to support the statement that Wal-Mart has achieved very good
strategic fit between its competitive and supply chain strategies? (Page - 43)
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Wal-Mart’s competitive strategy depend on three parts: high product
availability, a wide variety of goods, and everyday low pricing. Consistently
providing a wide variety of goods at low prices presents a challenge to many
retailers due to the costs required in managing transportation, inventory,
facilities, and information. Their pioneering use of “cross docking” and
internal distribution system management allows for decreased transportation
costs for a wide variety of goods while cutting inventory needs, i.e., it allows
them to strike a balance between high product availability (responsiveness)
and cost (efficiency) that meets their customers’ expectations. Their supply
chain strategy also capitalizes on the relatively stable demand for their
products, which is a function of their infrequent usage of product promotions
and their everyday low pricing strategy.
Finally, Wal-Mart recognizes its suppliers capabilities and has partnered
with key suppliers to allow these suppliers to manage replenishments
through vendor managed inventory (VMI) enabled by information sharing
agreements. In summary, Wal-Mart’s supply chain was constructed and is
managed to enable providing a wide variety of stable-demand items at
consistently low prices, which is their competitive strategy.
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4. Motorola has gone from manufacturing all its cell phones in-house to almost
completely outsourcing the manufacturing. What are the pros and cons of the two
approaches? (Page - 65)
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The set of business processes is sourcing required to purchase good and
services. These decisions are crucial because they impact the level of
efficiency and responsiveness that Motorola can achieve. The Motorola
production system for their line of pagers was hailed as a breakthrough in
mass customization, so it was somewhat stunning when Motorola outsourced
cell phones.. Sourcing decisions should be made based on the total supply
chain surplus; if a third party can help the chain achieve greater surplus,
then the function is a prime candidate for outsourcing. Motorola was willing
to give up some control and possibly some of its design talent and assembly
expertise because it felt that the supplier could provide product of an
appropriate level of quality with the responsiveness necessary. Products and
services that are outsourced are rarely brought back in-house and should
never be tied too closely to the outsourcing party’s core competency.
5.
Amazon.com sells books, music, electronics, software, toys, and home
improvement products online. In which product category does e-business offer the
greatest advantage compared to a retail store chain? In which product category
does e-business offer the smallest advantage (or a potential cost disadvantage)
compared to a retail store chain? Why? (Page - 113)
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greater advantage when selling pc then when selling books because product
differ nation in pc can be postponed until after the costumer has placed an
order whereas books are currently published well in advance of a sale and
transportation cost represent a much higher portion of the cost of books and
a relatively small portion of the cost of pc .
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