2.

Explain the major difference between demand uncertainty and implied demand uncertainty
using the example of the iPhone 6 plus.
Demand uncertainty reflects the uncertainty of customer demand for a product. Implied demand
uncertainty, is the resulting uncertainty for only the portion of the demand that the supply chain
plans to satisfy based on the attributes the customer desires. A new cell phone has high implied
demand uncertainty. Apple has more demand uncertainty than the local store. (micro/macro
demand) but in percentages not necessary
7. It is important to have strategic fit between the supply chain and its competitive strategy.
Given that creating strategic fit requires designing a supply chain whose responsiveness aligns
with the implied uncertainty, list the supply chain’s abilities with regard to responsiveness
- Respond to wide range of quantities demanded
- Meet short lead times- Handle a large variety of products
- Build highly innovative products
- Meet a high service level
- Handle supply uncertainty
Responsiveness: how fast is the company able to respond to a customer when he wants to buy a
product.
9. A successful company needs to strike a balance between responsiveness and efficiency.
Discuss how companies should prepare for globalization in terms of responsiveness
Efficiency: cost-based, you can always responsive by increasing costs. But balance: keeping
costs low but responsiveness high. For example bol.com wants to expand to Australia, less
responsive. But new warehouse, more costs, higher responsiveness ? balance. Globalization has
increased both the opportunities and risks for supply chains. Firms must account for global risks
and uncertainties if they want to maintain strategic fit. So firms must maintain a higher
responsiveness. Globalization means if you want to keep high level of responsiveness you have
to increase costs, by more warehouses etc.
7. what would be the impact of increasing product variety on implied demand uncertainty in the
case of a convinience store like 7-11?
Assignment/Question #1 7-Eleven’s implied demand uncertainty can be categorized as high, due
to the nature of the customer needs and product properties. Customer needs: customer is usually
in a hurry making an urgency-buy, he has a low tolerance for response time, requires high
product availability & high service level. The range of quantity demanded can also be high due
to unexpected events, for example a nearby baseball game increasing the demand for beer and
chips. These customer needs causes a high implied demand uncertainty. Products properties:
middle range of products (3000SKUs); 60% of total sales at each store are processed and fast
foods; 50% changes in the course of a year due to seasonal demand & new products; local
preferences are important and vary; different consumption patterns throughout the day; stores
have limited shelf space and little buffer inventory (limited store size). 7-eleven supply
uncertainty is medium to high. Supply uncertainty is increased due to: high diversity of products,
perishable products (e.g. frozen and dairy products), the rate of innovative/number of new
products, possible delivery delays due to dense traffic around stores as well as possible low
yields further upstream the supply chain (2nd, 3rd tier suppliers of raw materials e.g. rice). All
these attributes call for a responsive supply chain. Assignment/Question #2 7-Eleven has a high
degree of responsiveness, due to the high implied demand uncertainty and medium-high supply
uncertainty. It is very crucial for their supply chain ability to respond to wide ranges of quantities
demanded, meet short lead times, handle a large variety of products, meet a very high service
level and handle supply uncertainty due to the customer needs mentioned above. Additionally
they are innovative in the sense that they introduce constantly new products.