DISCUSSION QUESTIONS

Q. Why do some firms keep stocks close to the market while others keep
stocks in the component form at their plants? How do these decision affect
their performances?
Ans This decision depends on the product that the company is dealing with.
For FMCG products they are kept close to the market as the demand is
stable and the production can be planned in advance, where as in case of
technology or fashion products, they are kept in component form as the
technology / demand is not stable and thus alteration might be required in
production.
This decision affects the performance of a company as improper decisioning
might lead to obsolescence and stock out costs.

DISCUSSION QUESTIONS
Q. Over a period of time, a product is likely to move from the introduction
stage to the growth stage and from growth stage to maturity stage. Would
this movement across different stages of product life cycle affect supply
strategy and practices of the firm?
A. The supply chain integration effort of a product/process in the birth or
growth stage would be expected to pursue extensive breadth integration
because that is more consistent with
the lower volume, smaller competitor, flexibility-focus, and other
characteristics of “early stage” life cycles. Thus, “later stage” life cycles are
expected to be associated with less breadth.
Therefore, it can be said that as firms move from start-up/growth stages to
mature/decline stages, the less the breadth of supply chain integration.

DISCUSSION QUESTIONS
Q. Titan offers two brands of watches – Sonata and Fastrack.
Sonata is targeted for a mass market while Fastrack is targeted for
a premium segment. Should Titan manage both brands with the
same supply chain? Should they share warehouses, transportation,
supply chain software or handle them separately?
There should be a separate supply chain for Sonata and Fastrack
as Sonata is a low value mass product the components of which
can be outsourced. Where as fastrack is a fashion product which is
priced higher than Sonata and the components can be kept in
house.
Also, the time required to make Sonata products, which catered
more to semi-urban and rural markets, was less than that needed
for other watches under the overall Titan brand. The batch sizes for
Sonata were also larger.
Considering the above there should be a separate supply chain for
both.

DISCUSSION QUESTIONS
3.

Titan offers two brands of watches – Sonata
and Fastrack. Sonata is targeted for a mass
market while Fastrack is targeted for a
premium segment. Should Titan manage both
brands with the same supply chain? Should
they share warehouses, transportation, supply
chain software or handle them separately?

4.

A firm complaining high demand uncertainty,
has a very poor contribution margin.
Consequently, it is not able to apply ideas
suggested in the literature for innovative
products. What is your advice on this issue?