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WEEK 6
Assignment

Chapter 13

Question 4

How can postponement of product differentiation be used to improve supply chain

profitability?

The process of postponement is delaying the Product differentiation until a time close

enough to the sale of the product. The process improves the supply chain profitability since there

will be an increase in the customer order and hence an increase in the profits and also there is a

reduction in the inventories. Another significance of the process of postponement arises as a

result of the improvement in the supply and demand. The increase in the demand and supply,

therefore, ensure an increase in the increase in the revenue, therefore, leads to the increase in the

supply chain profitability. The postponement is more valuable to firms selling a large variety of

products and having an unpredictable demand; the products should also be independent and

comparable in size.

Question 7

When can tailored sourcing be used to improve supply chain profits? What are some

challenges with implementing tailored sourcing?

Tailored sourcing is used when there is a supply source such that one is to serve as a

backup to the other is not efficient. The sources must focus on different capabilities, the flexible

source must mainly focus on the responsibilities and is to be required to serve some predictable

demands. Tailored sourcing is also used during the low lead time, which is the time when the

products of the firm are not the most preferable in the market at the time. The challenges that are
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associated with tailored sourcing include the fact that a valued tailored sourcing leads to a

reduction in the cost that is only achievable if the sources are facing no variability.

Chapter 14

Question 3

Wal-Mart designs its networks so that a DC supports several large retail stores. Explain how

the company can use such a network to reduce transportation costs while replenishing

inventories frequently

In the network the company can reduce the cost of transportation since the network

employs the use of cross-docking, milk runs, there are also TL and LTL carriers. These are

accompanied by the package carriers in some instances. The company does this with the aim of

using appropriate option in each and every situation that arises. The company also ensure that the

products that are highly demanded are the once that are shipped directly while the low demanded

products are shipped to low-demand outlets that are consolidated to and from the DC. The

company, however, is undergoing a tough time in managing the kind of network due to the

several shipping procedures that are involved in the process. There is a large investment

therefore on infrastructure for the facilitation of the coordination process. The advantage of the

network is that there is a free selection of shipment methods from some available methods and

hence minimization of transportation of the transport and inventory cost.

A DC has the strength to replenish the retail inventories for sometimes. The DC

dividends the stock coming from the manufacturers on a given side of the warehouse and

forwards them to the locations of the given retailors on the leaving side. The retail demands
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aggregation at the DC level leads to the reduction of stock in the DC, and the low stock leads to

the process of replenishing to go down.

Question 4

Compare the transportation costs for an online business such as Amazon and a retailer such

as Home Depot when selling home-improvement materials.

The primary difference between the above retailers includes the fact that unlike Amazon,

Home Depot does not incur any outbound transportation. These costs that Home Depot does not

face include the cost for residential customers. For the case of Home Depot, there are a

substantial inbound transportation charges. The cost that is available is that for offloading the

outbound transportation cost to a large number of their customers. To ensure the success,

Amazon must use high-cost package carriers for its products so as to ensure that they avoid

inbounds costs of transportation. Amazon has to pay for both inbound and outbound items that

are held in any of their warehouses.

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Reference

Chopra, S., & Meindl, P. (2007). Supply chain management: Strategy, planning, and operation.

Upper Saddle River, N.J: Pearson Prentice Hall.