Supply Chain Management

Assignment 1

Zara Arif
01-246182-016
MS(EM)-3A

Department of Software Engineering

BAHRIA UNIVERSITY, ISLAMABAD
Why did Gateway choose not to carry any finished-product inventory at its
retail stores? Why did Apple choose to carry inventory at its retail stores?

Gateway has developed a strategy to avoid shipping finished goods in retail stores. The company's
strategy is to design a supply chain that meets supply and demand. The decision not to make any finished
goods inventory at a retail store is based on two factors:
Allow maximum flexibility in product configuration, and
There is no need to keep inventory at retail stores.
This flexibility in product configuration will enable the company to manage changes in customer demand
as the final product can only be configured after the customer places an order. It would also allow the
company to implement a Customer Relationship Management strategy.

Apple aimed to satisfy the customer’s need for immediate purchase, also provide them with the
experience of a finished product. No delivery time because the product is on the shelf. Lower
shipment costs, since the products can be bundled and shipped to the retail store, from where
they are picked up by the customer. Limited product variety, since the products are already on
the shelf. Better customer service since the customer has the experience of trying out the finished
product, and can walk out of the store with a product in hand.