Quiestion and answer Assignment 2 PDF

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SUPPLY CHAIN MANAGEMENT (Assigment 2)

Problem 1: Discuss the advantages of a push-based supply chain. What about a pull-basedsupply chain? Answer: Advantages of a Push Based Supply Chain: a) Products with low demand rate can be stocked. b) Production and Distribution decisions based on long term forecasts. Advantages of Pull Based Supply Chain: a) Production and Distribution demand are coordinated with true customer demand ratherthan forecasted demand. b) Firm does not hold any inventory and only responds to certain orders c) Reduced lead times through the ability to better anticipate the incoming orders fromthe retailers. d) Reduce inventory levels. e) Less variability in the system. f) Reduced inventory at the manufacturer to due to the reduction in variability.

Problem 2. What is an example of a product with a primarily push-based supply chain? A product with a primarily pull-based supply chain? Answer: Push Supply Chain: Imagine a clothing manufacturer designs and produces a new type ofraincoat. If the manufacturer employs a push strategy to promote the raincoat, it wouldcontact wholesalers to generate interest in the product. If a wholesale company believes it canconvince retail stores within its network to stock the raincoats, it would buy some. Themanufacturer takes payment and leaves the promotional chain. The wholesaler then tries tosell the coats to retailers at a slight markup. Pull Supply Chain: A perfect example of an almost ideal pull supply chain is the Dell business model. Michael Dell started manufacturing computers out of his dorm room while incollege. The difference between him and his competitors is that he did not own a storefront ora manufacturing plant. He had to keep his inventory down to a minimum, if any at all, anddid not have room for parts storage, no matter how small the components may have been. Tocounter these constraints, Dell created the ultimate business model: customers built their computer‟ s specifications on the internet, and using those specifications, the computer was built. Not a single spare part was left over, and Dell had no inventory, as each computer wasshipped out the door as soon as it was manufactured.

Problem 3. What are the advantages of moving the push- pull boundary earlier in a supplychain? What about later? Answer: Advantages of Push-Pull Boundary earlier: a) Less inventory holding cost due to the system being „pull‟ at an earlier stage. b) Postponement of product design can be made Advantages of Push Pull Boundary Later: a) Lead time can be reduced to the customers and retailers. b) On time delivery of products. c) Reduces Bull Whip effect due to the reduction in variability at the earlier stages...