Notesale: Turn your study into money

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Linear programming model (LP)- most widely used
-   Steps in the process
o   Define decision variables
o   Formulate the model using the decision variables
o   Write objective function equation
o   Write each constraint equations
o   Implement in excel
o   Solve with solver
Constraints
-­‐‑   Restrictions or limits on our decisions
-­‐‑   As many as necessary
-­‐‑   Can be independent
-­‐‑   Demand constraint- how much can you sell
-­‐‑   Resource constraint- how much resources do you have to make an amount
Supply chain (like a network or web) Goal-make the most supply chain profit as possible
-   Stages – supplier-manufacturer-distributor-retailer-customer
o   All stages may not be present in all supply chains (ex
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-   Decisions significantly influence both the revenue generated and the cost incurred
o   Successful supply chains manage flows of product, information, and funds
to provide a high level of product availability to the customer while
keeping costs low
Three key supply chain decision phases and their significance
-   Strategic (design)- how to structure the supply chain over the next several years,
long term impact
-   Planning- decisions over the next quarter or year, includes production plans,
subcontracting, and promotions
-   Operational- daily or weekly, includes sequencing production and filling specific
orders
-   Strategic provides constraints for planning, planning provides constraints for
operational
Describe the cycle and push/pull views of a supply chain
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-   Supplier relationship management (SRM)- all processes at the interface between
the firm and its suppliers

-   Internal Supply Chain management (ISCM) – all processes that are internal to the
firm orders
-   Customer (CRM) – all processes at the interface between the firm and its
customers
Strategic supply chain decisions
-   Locations and capacities of facilities
-   Products to be made or stored at various locations
-   Modes of transportation
-   Use of information systems
Consider the purchase of a can of soda at a convenience store
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-   Purchase of a can of soda happens at the end of the supply chain
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-   Can goes to the retailer once the money has been given to the distributor
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-   The manufacturer gives information and money to suppliers to receive raw
materials
Why should a firm like Dell take into account total supply chain profitability when
making decisions?
-   Dell’s success is determined by their supply chain success and ability to produce
supply chain surplus
-   Can only be successful if all members cooperate and focus on their global goals
rather than tiny goals
What are some strategic planning and operational decisions that must be made by an
apparel retailer like The Gap?
-   Strategic decisions- capacity of each supplier and assembly operations, how
logistics are to be handled, and the type of communication
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Consider the supply chain involved when a customer purchases a book at a bookstore
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-   Customer order cycle- when the book is selected and paid for by the customer
-   Replenishment cycle- when a book would need to be restocked
-   Manufacturing cycle- when the manufactures have to print more books

-   Procurement cycle- when the manufacturer has to get more raw materials to
produce the book
-   Push/pull boundary- between customer order cycle and replenishment cycle
o   Customer order pulls the book from the shelf of the bookstore, but the
initial production of the book was produced by a build order that moved
materials along the supply chain to the retailer
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Identify the push/pull boundary and two processes each in the push and pull phases
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-   Pull phase processes- shipping and customer billing
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-   Sourcing, promotion, and fulfillment decisions
How could a grocery store use inventory to increase the responsiveness of the company’s
supply chain?
-   Increase cycle inventory or reduce cycle time
How could an auto manufacturer use transportation to increase the efficiency of its
supply chain?
-   Reduce transportation costs by choosing an inexpensive transportation mode or
designing an efficient transportation network
How could a bicycle manufacturer increase responsiveness through its facilities?
-   Increase number of facilities; make them more flexible, or increasing capacity
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How could an industrial supplies distributor use information to increase its
responsiveness?
-   Consists of data and analysis concerning facilities, inventory, transportation,
costs, prices, and customers throughout the supply chain
-   Information consists, connects, and directly affects each of the drivers within a
supply chain
How can a home delivery company like Peapod use pricing of its delivery services to
improve its profitability?

-   Use short-term discounts to eliminate supply surpluses or decrease seasonal
demand spikes by moving some of the demand forward
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What are some industries in which products have proliferated and life cycles have
shortened? How has the supply chains in these industries adapted?
-   Electronics, beverages, and food
-   Adapted by coming out with new things faster and focusing more on customer
service and less on price negotiations
How can the full set of logistical and cross-functional drivers be used to create strategic
fit for a PC manufacturer targeting both time sensitive and price conscious customers?
-   Using a strategy that involves all drivers
-   Facility should have a good distribution network
-   Inventory should stay close to the customer
-   Transportation should cater to the targeted customers
-   Information should be updated regularly
-   Outsource to increase efficiency
-   Time sensitive customers should be charged more for the extra value being
provided
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Would you expect a brick –and-mortar retailer or an online retailer to have a higher asset
turnover? Which supply chain driver’s impact asset turnover?
-   Accounts receivable, inventory, and facilities
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-   Your previously friendly partners may no longer be willing to align strategically
-   The very reliance of virtual companies on partners, suppliers, and other outside
companies exposes them to strategic hazards
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Under what types of conditions should a company consider outsourcing a particular

competency? What is a core competency? How do competencies differ from capabilities?
-   The conditions in which a company should outsource a particular competency
o   If you are a large company who can afford it
o   Any activities that are not considered necessary to preserve the core
competency
-   Core competency -defining capability or advantage that separates a company from
its competitors
-   Capability is a term that implies abilities that are not yet developed, while
competency describes the abilities and skills you already have
A convenience store chain attempts to be responsive and provide customers what they
need, when they need it, where they need it
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What are some risks associated
with this choice?
-   If you have a larger customer crowd one day and more the other days you may
run out faster and regular customers may have to go to a different store
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What benefit does Seven-Eleven derive from this policy?
When is direct store delivery more appropriate?
-   Benefits- saves time and total control over their own system
-   Direct Store Delivery- more appropriate when the supplier has a s system that is
similar to Seven-Eleven’s= many stores in one area
o   Transportations system is flexible to increase awareness and efficiency
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What are the pros and cons of

this approach? Keep in mind that wholesalers replenish stores and DSD are by
manufacturers
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The United States has food service distributors that also replenish convenience stores
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What about food supply chains draws a unique distinction from other types of supply
chains?
-   High chance of contamination and different types of disruptions, can lead to food
recall, less time food is in the supply chain reduce this risk
-   Food hygiene and safety have to be a number one priority since digestion could
lead to illness or even death
-   Longer transit timeàshorter shelf life, frozen food more likely to spoil
-   Consumers will pay more for no quality failures within the food supply chain
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-   It is harder to trace the origin of the food supply chain than from another type of
supply chain
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-   Short transit time so longer shelf life and not spoilage
-   Only use global supply sources with high number of restrictions so that there is
less chance of quality failures
-   Traceability needs to be more accessible so that if there is a problem, the origin
can be traced and the problem can be fixed so that it does not occur again
-   There needs to be a paper trail from every farm a product comes from

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