Southeast University Bangladesh

Assignment 1
Submitted to: Farzana Akter
Title: Supply Chain & Operations Management
Course Code: MGT311.
Section: 02

Semester: Fall
Program: BBA (50 batch)
Question Number 1.
How supply chain decisions playing an important role for making business sustainable? Briefly
explain with appropriate examples.

Answer:

There are four major decision areas in supply chain management:

1) location, the geographic placement of production facilities, stocking points, and sourcing
points is that the natural opening move in making a provide chain. the situation of facilities
involves a commitment of resources to a semi-permanent arrange. Once the dimensions, number,
and placement of those are determined, thus are the attainable ways by that the merchandise
flows through to the ultimate client. These selections are of nice significance to a firm since they
represent the fundamental strategy for accessing client markets, and can have a substantial
impact on revenue, cost, and level of service.

2) production, the strategic choices embody what merchandise to supply, and that plants to
supply them in, allocation of suppliers to plants, plants to DC's, and DC's to client markets. As
before, these choices have an enormous impact on the revenues, prices and client service levels
of the firm. These choices assume the existence of the facilities, however verify the precise
path(s) through that a product flows to and from these facilities. Another vital issue is that the
capability of the producing facilities--and this mostly depends the degree of integration among
the firm.

3) inventory, these consult with suggests that by that inventories square measure managed.
Inventories exist at each stage of the provision chain as either raw materials, semi-finished or
finished product. they'll even be in-process between locations. Their primary purpose to buffer
against any uncertainty that may exist within the provide chain.

4) transportation (distribution), The mode alternative side of those selections area unit a lot of
strategic ones. These area unit closely coupled to the inventory selections, since the most
effective alternative of mode is usually found by trading-off value the price} of mistreatment the
actual mode of transport with the indirect cost of inventory related to that mode.
And there are both strategic and operational elements in each of these decision areas.

Supply chains are the engines for today’s world economy, serving to deliver product and services
round the world, connecting businesses and also the people United Nations agency work for
them across geographic, industry, cultural and regulative boundaries. supply chain sustainability
provides that corporations can still meet their desires within the future, in economic, social,
moral and environmental terms. It ensures compliance with laws and regulations yet as
adherence to and support of international principles for property business conduct. additionally,
corporations are increasingly taking actions that result in higher social, economic and
environmental impacts as a result of society expects this and since there are business advantages
in doing so. By managing and seeking to boost environmental, social and economic performance
and good governance throughout supply chains, corporations act in their own interest, the
interests of their stakeholders and also the interests of society at massive. By implementing
supply chain sustainability programs, corporations interact with each direct and sub-tiers
suppliers, mainstreaming values and actions right down to staple producers, and maximizing the
overall social, environmental and moral impact.

As example, the main focus here is to get better profit and get a good outcome from the
company. To do so, supply chain decision is the only option for better sustainability. If any
company make a mark to goal that it wants to achieve it need to go step by step and reach to the
goal, and those steps are the supply chain decisions.
Question Number 2.

Inventory is an asset for any business. But it also costs a lot. Now, from your perspective, discuss
how it is playing a role in developing competitive strategy of any business?

Answer:

Inventory is an important asset for any business. It’s basically the items that are currently stored
or available to the company. It satisfies the demand for product, and impacts costs, assets,
responsiveness, material flow time etc.

Inventory can play important role to develop competitive strategy. Inventory management can be
a competitive advantage by effectively matching supplies of goods with demand. Inventory
management is very vital to an enterprise since it is custom-made to reducing costs or
proliferating profits while satisfying customer’s demands by guaranteeing that balanced items of
stock are sustained at the right quality, quantity, and that are obtainable at the right time and in
the right place. Inventory management is very crucial to any organization that is improving on its
performance and attaining high levels of customer satisfaction. Most organization invests so
much money in materials and it is important for the organization to put in place a good material
management system in order to manage the stock properly. Poor inventory management system
can negatively affect the profitability of an organization. Inventory is playing important role to
develop the competitive strategy by forming the supply chain running in the marketplace. And
the form, location and quantity of inventory allows a supply chain to range from being very low
cost to very responsive. The main objective is to have right form, location and quantity of
inventory that provides the right level of responsiveness at the lowest possible cost. If a company
have the inventory decisions to make it can be cycling the inventory which is average amount of
inventory used to satisfy demand between shipments. There’s more of safety inventory which is
cost of carrying too much inventory versus cost of losing sales. This inventory held in case
demand exceeds expectations. Inventory built up to counter predictable variability in demand.
Cost of carrying additional inventory versus cost of flexible production. The fraction of demand
that is served on time from product held in inventory, and trade off between customer service
and cost.
Question Number 3.

a. How your business can maximize the value of supply chain surplus? Explain Briefly.

Answer:

Supply chain surplus is said to sustainability and may be further understood through the
practices of traceability and transparency. Traceability is 'the follow of sharing data among
offer chain partners concerning materials that meet trade standards for minimising
environmental risk', and Transparency is 'the flow of cash through the whole offer chain with
a definite goal of guaranteeing that every organization makes enough of a profit to try to over
simply subsist'. In essence, traceability cares with however things are created throughout the
chain whereas transparency cares with keeping profits flowing through the whole chain. To
maximize surplus, it's necessary to confirm continuity of the availability chain system by
holding every partner within the chain reinvest, innovate, and grow. The goal of increasing
company profits will generally additionally result in conflict between the stages of provide
chain. for example: each the provider and therefore the manufacturer during a provide chain
might favor to have the opposite facet hold most of the inventory, with the goal of rising their
profits. If the 2 parties cannot look on the far side their own profits, the additional powerful
party can then merely force the opposite to carry the inventories.

Important is all the stages ought to have the profit and worth during a strategic provide chain. For
all the stages to derive profit it's vital that each the parties work along to cut back the number of
inventories needed. so, by reducing inventories and total price, the availability chain surplus will
be accrued.
 b. Suppose you are going to start a hotel/resort business, what will be your business’ pricing
technique and why?
Answer:
Pricing a product is one in all the foremost necessary aspects of your selling strategy.
Generally, pricing strategies include the subsequent 5 strategies.

Cost-plus pricing—simply calculating your costs and adding a mark-up

Competitive pricing—setting a value supported what the competition charges

Value-based pricing—setting a value supported what quantity the client believes

what you’re merchandising is price

Price skimming—setting a high value and lowering it because the market

evolves

Penetration pricing—setting a low value to enter a competitive market and

raising it later

I will use Penetration pricing strategy to start a hotel/resort business. Because if the quality of
my place will take the attention of the customers I will gain more customers through review. And
then I can sum up more price to make sure the profit. And that’s how I won’t lose any customer
due to the reputation of the place. It will be easier for me to gain proper value through all
customers that want to pay a visit.
Question Number 4.

In this pandemic situation online businesses are flourishing. Suppose you have also decided to
open an online business. Now, from the perspective of supply chain, what costs you have to face
while conducting online business? And what sorts of benefits you would get to do online
business than opening retail shop? Discuss.

Answer:

In this pandemic situation online businesses are now doing so well in the market. That’s why I
have also decided to open an online business. As the perspective of supply chain, I have to face
some costs while conducting online business. There are 5 costs that maintains with supply chain.

Which are:

1. Investment Costs
2. Transportation Costs
3. Procurement Costs
4. Production Costs
5. Inventory Costs

To maintain a business, I need to keep in mind these 5 things for my benefit. First of all, I
need to invest in my business. The amount that I can sell easily not more than that. The
second thing is transportation cost, that my product I will carry to my inventory. The next
thing is packaging cost. I will not be needed the production cost because I am getting it from
a party. And the last I will be needed an inventory that I will keep my products on. As the
online business I will face some consequences that can be a wall for me to sell my products.
To overcome those walls, I will pre-plan about my products. As my product will be clothing,
I will try to make it cost as cheap as I can. Because, in this situation people will search for the
less pricing product for their choices. I will use Cost-plus pricing here. Because, only by this
type of product pricing I can get benefits. This online business policy will give me more
profit than a retail shop. Reason for that, people will come out less to buy products. They are
now interested in home delivery and online shopping these days. They can browse through
internet and search for product and here I am selling online product which will be both for
seller and customer. That how I can earn more and get more benefit than I could make with a
retail shop. I can earn the raw benefits from the product because I am not producing but I am
directly selling the products.