Which distribution network design is being used when the distributor retailer?

5 typical stages in a supply chain

customers
retailers
distributors/wholesalers
manufacturers
suppliers (of components/raw materials)

Tailoring the supply chain requires sharing operations for some links in the supply chain while having separate operations for other links.
The links are shared to achieve ______ _____ _____ while providing the appropriate level of ____________ to each segment.

maximum possible efficiency;
responsiveness.

Processing costs for last-mile delivery are much _______________ than those for a network of retail stores because all customer participation is eliminated.
A grocery store using last-mile delivery performs all the processing until the product is delivered to the customer's home, unlike a supermarket, where the customer does much more work.

(~Customer Need...)
number of channels through which product may be acquired increases

(impact of customer needs on implied demand uncertainty)

(~causes implied demand uncertainty to...)
increase because the total customer demand is now disaggregated over more channels

Which of the following customer needs will cause implied uncertainty of demand to increase?
a. Range of quantity required increases
b. Lead time decreases
c. Variety of products required increases
d. Required service level increases
e. all of the above

Which of the following is an advantage of manufacturer storage with direct shipping?

A) Transportation costs are low because the average outbound distance to the end consumer is small and package carriers are used to shipping the product.
B) Supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated.
C) Response times tend to be small because the order has to be transmitted from the retailer to the manufacturer.
D) Order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer.
E) The handling of returns is likely to be simple and inexpensive, improving customer satisfaction.

B) Supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated.

_______________ is the fraction of demand that is served on time from product held in inventory.

level of product availability

Distributor storage requires much _______________ inventory than a retail network.

The ________ ________ in a supply chain separates push processes from pull processes.

Given the limited radius that can be served with _______________ , more warehouses are required compared to when package delivery is used.

Inventory exists in the supply chain because of

a mismatch between supply and demand

The major disadvantage for retail storage is the _______________ inventory and facility costs.

For manufacturer/distributor storage with customer pickup, there is some _______________ of customer experience, because unlike the other options, customers must pick up their own orders. On the other hand, customers who don't want to pay online can pay by cash using this option.
Experience is sensitive to capability of pickup locations

retail storage with customer pickup is best suited for _______________ items or items for which customers value _______________ response.

Changing the distribution network design affects which 4 supply chain costs?

-inventories
-transportation
-facilities and handling
-information.

Firms that target customers who value _______________ times need to locate facilities _______________ to them. These firms must have _______________ facilities, each with a _______________ capacity.

short response;
close;
many;
low

In the ________ ________ , the processes in a supply chain are divided into a series of cycles, each performed at the interface between two successive stages of the supply chain.
Not every supply chain will have all four cycles clearly separated.

the internet allows a customer to place an order at any _______________ time. Online sales also allow a firm to access customers who are _______________ distant.

convenient;
geographically

Which of the following is an advantage of retail storage with customer pickup?

A) Inventory cost is higher than all other options.
B) Transportation cost is lower than all other options.
C) Facilities and handling costs are higher than other options.
D) Product variety is lower than all other options.
E) Product availability is more expensive to provide than all other options.

B) Transportation cost is lower than all other options.

Zara sources basic products such as white t-shirts from low cost countries because demand is predictable. For trendy products for which demand is unpredictable, Zara sources from company-owned higher cost factories in Europe. For the predictable demand, Zara strives for ________ and for the unpredictable demand, Zara hopes to achieve ________.

The more capabilities constituting responsiveness a supply chain has,

the more responsive it is.

Manufacturer storage with direct shipping is best suited for a _______________ of _______________, _______________ items for which customers are willing to wait for delivery and accept several partial shipments

large variety;
low-demand;
high-value

Response times for last-mile delivery are _______________ than those for package carriers

Supply chain Strategy/design decisions include

- whether to outsource or perform supply chain function in house
-location and capacities of production and warehousing facilities
-products to be manufactured or stored at various locations
-modes of transportation available along different shipping legs
-type of information system to use

For manufacturer/distributor storage with customer pickup, returns can be potentially handled at the pickup site, making it _______________ for customers. From a transportation perspective, return flows can be handled using the delivery trucks.

Which of the following is an advantage of manufacturer/distributor storage with customer pickup?

A) Facility costs can be very high if new facilities have to be built.
B) Transportation cost is lower than the use of package carriers, especially if using an existing delivery network.
C) Order visibility is difficult but essential.
D) Product variety is similar to other manufacturer or distributor storage options.
E) Significant investment in information infrastructure required.

B) Transportation cost is lower than the use of package carriers, especially if using an existing delivery network.

Response times for in-transit merge may be _______________ if the shipments from various sources are not coordinated.

Which of the following would be a disadvantage of manufacturer storage with direct shipping?

A) The ability to reduce cost of inventory by centralizing inventories at the manufacturer.
B) The manufacturer has to postpone customization until after the customer order has been placed.
C) Supply chains have to eliminate other warehousing space to save on the fixed cost of facilities.
D) Response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer's centralized site.
E) Provides a good customer experience when a single order containing products from several manufacturers is delivered in partial shipments.

D) Response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer's centralized site.

The goal of the supply chain planning phase is to ________ the supply chain surplus that can be generated over the planning horizon given the constraints established during the strategic or design phase.

A firm that is not on the efficient frontier can improve both its _________ and its ___________ by moving toward the efficient frontier.

responsiveness
cost performance

with the _______________ in lot size, comes an increase in _______________ .

Amazon uses different prices for the products that are purchased from the company — often for the speed of the shipping. What is the name of this pricing scheme?

The value of the final product may vary for each customer and can be estimated by the ________ amount the customer is willing to pay for it.

_______________ is the amount of time it takes for a customer to receive an order

A firm should add facilities beyond the cost-minimizing point only if managers are confident that the increase in revenues because of _______________ will be greater than the increase in costs because of the _______________ .

better responsiveness;
additional facilities

Both the product ________ ________ and the various ________ needs that the supply chain tries to fill affect ________ ________ ________ .

demand uncertainty;
customer;
implied demand uncertainty

_______________ is the time it takes to bring a new product to the market.

Companies produce or purchase in _______________ lots to exploit economies of scale in the production, transportation, or purchasing process.

The ______ _____ _______ is tailored to each product, channel, or customer segment.

For manufacturer/distributor storage with customer pickup, a significant _______________ is needed to provide visibility of the order until the customer picks it up. Good coordination is needed among the retailer, the storage location, and pickup location.

information infrastructure

Distributor storage with carrier delivery is well suited for _______________ moving items. It also makes sense when customer want delivery _______________ than is offered by manufacturer storage but do not need delivery immediately.

Webvan designed a supply chain with large warehouses in several major cities in the United States, from which groceries were delivered to customer homes. They failed partly because of
A) low demand for their service.
B) slow inventory turnover compared to industry averages.
C) higher labor costs for picking orders.
D) poor quality products.

C) higher labor costs for picking orders.

Companies using seasonal inventory build up inventory in periods of _______________ demand and store it for periods of _______________ demand, when they will not have the capacity to produce all that is demanded.

Distributors add value to a supply chain between a supply stage and a customer stage

A) if there is a small number of customers requiring a large amount of product.
B) if there is a large number of customers requiring a large amount of product.
C) if there are many small players at the customer stage, each requiring a small amount of the product at a time.
D) if there are a few large players at the customer stage, each requiring a large amount of the product at a time.
E) Distributors do not add value to a supply chain.

C) if there are many small players at the customer stage, each requiring a small amount of the product at a time.

only _______________ companies end up using a single distribution network.

On which dimensions should the performance of a distribution network be evaluated at the highest level?
A) Profitability of individual supply chain components
B) Efficiency of overall supply chain network
C) Customer needs that are met
D) Cost of meeting customer needs
E) C and D only
Answer: E

Answer: E) C and D only
C) Customer needs that are met
D) Cost of meeting customer needs

For a supply chain, _______________ is the rate at which sales occur.

The important points to remember about achieving strategic fit are
a. there is one best supply chain strategy for all competitive strategies.
b. there is no right supply chain strategy independent of the competitive strategy.
c. there is a right supply chain strategy for a given competitive strategy.
d. all of the above
e. b and c only

e. b and c only

b. there is no right supply chain strategy independent of the competitive strategy.
c. there is a right supply chain strategy for a given competitive strategy.

Relative to manufacturer storage, distributor storage requires a _______________ level of inventory _______________ of aggregation.

Improvement in supply chain performance at the result of distributors occurs for which of the following reasons?

A) Reduction in transportation cost because of LTL shipments from manufacturers to distributor.
B) Reduction in outbound transportation cost because the distributor combines products from many customers into a single outbound shipment.
C) Reduction in inventory costs because distributor disaggregates safety inventory rather than aggregating at each retailer.
D) A more stable order stream from distributor to manufacturer (compared to erratic orders from each retailer) allows manufacturers to lower cost by planning production more effectively.
E) By carrying inventory closer to the point of sale, manufacturers are able to provide a better response time than distributors can.

D) A more stable order stream from distributor to manufacturer (compared to erratic orders from each retailer) allows manufacturers to lower cost by planning production more effectively.

Distributor storage can handle somewhat _______________ variety than manufacturer storage but can handle a much _______________ level of variety than a chain of retail stores.

_______________ decrease as the number of facilities are reduced because a consolidation of facilities allows a firm to exploit _______________ .

Facility costs;
economies of scale.

All products may be made on the same line in a plant, but products requiring a ______ _____ ____ _______ may be shipped using a fast mode of transportation, such as FedEx.
Products that do not have _____ _______ needs may be sent by slower and less expensive means such as truck, rail, or even ship.

high level of responsiveness;
high responsiveness.

Which of the following is an advantage of distributor storage with last mile delivery?

A) More expensive to provide product availability than any other option except retail stores.
B) Inventory cost is higher than distributor storage with package carrier delivery.
C) Response time is very quick ranging from same day to next day delivery.
D) Transportation cost is higher than any other distribution option.
E) Returnability is harder and more expensive than a retail network.

C) Response time is very quick ranging from same day to next day delivery.

W.W. Grainger holds ________ with ____ implied uncertainty in its decentralized locations close to the customer.

Firms on the efficient frontier are also continuously improving their processes and changing technology to

shift the efficient frontier itself.

The value (also known as supply chain surplus) a supply chain generates is the different between what the value of the final product is to the ________ and the ________ the entire supply chain incurs in filling the customer's request.

(impact of supply source capability on supply uncertainty)
[[Supply source capability]]
frequent breakdowns
unpredictable and low yields
poor quality
limited supply capacity
inflexible supply capacity
evolving production process

[[causes supply uncertainty to...]]

increase
(for all of them listed)

The relationship where increasing implied uncertainty from customers and supply sources is best served by increasing responsiveness from the supply chain is known as the

The party performing the in-transit merge has _______________ facility costs because of the merge capability required.

Firms that target customers who can tolerate a long response time require _______________ _______________ that may be _______________ from the customer. These companies can focus on _______________ the capacity of each location.

only a few locations;
far;
increasing

_______________ are the costs incurred in bringing material into a facility.

inbound transportation costs

For manufacturer/distributor storage with customer pickup, product variety and product availability are _______________ to other manufacturer or distributor storage options.

Role (Component of facilities decisions)
Firms must decide whether production facilities will be _______, ________, or ______________.

flexible, dedicated, or a combination of the two

Which distribution network design is being used when inventory is not held by manufacturers at the factories, but is held by distributors/retailers in intermediate warehouses and package carriers are used to transport products from the intermediate location to the final customer?

A) Manufacturer storage with direct shipping
B) Manufacturer storage with direct shipping and in-transit merge
C) Distributor storage with package carrier delivery
D) Distributor storage with manufacturer pickup
E) Retail storage with customer pickup

C) Distributor storage with package carrier delivery

Even though each cycle has the same basic subprocesses, there are a few important differences among the cycles.
In the customer order cycle, demand is ________ to the supply chain and thus is ________ .
In all other cycles, ________ ________ is uncertain but can be projected based on policies followed by the particular supply chain stage.

With drop-shipping, customer experience is _______________ in terms go home delivery but can suffer if order from several manufacturers is sent as _______________ .

with drop-shipping, _______________ is expensive and difficult to implement

inventory role in the competitive strategy
Responsiveness- locate _______________ closer to customers.
Cost- _______________ inventory.

Distributor storage has a _______________ cost to provide the same level of product availability as manufacturer storage.

If the number of facilities is increased to a point at which inbound lot sizes are also very small and result in a significant loss of economies of scale in inbound transportation, _______________ the number of facilities _______________ total transportation cost.

The order-tracking feature for _______________ does become important to handle exceptions in case of incomplete or undelivered orders.

A key issue with regard to drop-shipping is the _______________ of the inventory at the manufacturer.
If specified portions of inventory at the manufacturer are allocated to individual retailers, there is little benefit of aggregation even though the inventory is physically aggregated.

________ processes are initiated and performed in anticipation of customer orders

A firm must ensure that the supply chain configuration supports its ________ ________ and ________ the supply chain surplus during this phase.

strategic objectives;
increases

Online sales can _______________ inventory levels by aggregating inventories far from customers if most customers are willing to wait for delivery.
A key point to note is that the relative benefit of aggregation is small for _______________ items with _______________ variability but large for _______________ items with _______________ variability.

lower;

high-demand;
low;
low-demand;
high

For last-mile delivery, the cost of providing product availability is _______________ than for every option other than retail sores.

7 Measures of customer value that are influenced by the structure of the distribution network

-response time
-product variety
-product availability
-customer experience
-time to market
-order visibility
-returnability

The internet offers an opportunity to create a _______________ buying experience for each customer.

________ implied demand uncertainty leads to ________ difficulty in matching supply with demand. For a given product, this dynamic can lead to either a stockout or an oversupply situation.

Social networking channels such as Facebook and twitter allows a firm to pitch products and promotions _______________ to customers.

Inventory affects the _______________ held, the _______________ incurred, and _______________ provided in the supply chain.

assets;
costs;
responsiveness

Distributor storage with last mile delivery requires _______________ levels of inventory than the other options (except for retail stores) because it has a _______________ level of aggregation.

supply chain success should be measured in terms of ________ ________ and not in terms of the profits at an individual stage.

Response times tend to be long with _______________ because of _______________ distance and _______________ stages for order processing.
Response time may vary by product, thus complicating receiving.

drop-shipping;
increase;
two

For manufacturer/distributor storage with customer pickup, a response time _______________ to that of using package carriers can be achieve

Although an increase in coordination is required, in-transit merge _______________ transportation costs relative to drop-shipping by _______________ the final delivery.

Two key decisions to make when designing a distribution network

1. will the product be delivered to the customer location or picked up from a prearranged site?
2. will the product flow through an intermediate location (intermediary)?

For retail storage with customer pickup, time to market is the _______________ with this option because the new product must penetrate through the entire supply chain before it is available to customers.

As a result of the planning phase, companies define a set of ________ ________ that govern ________ operations.

operating polices;
short-term

A _______________ facility performs all functions (e.g., fabrication and assembly) needed for producing a single type of product.

(~Customer Need...)
required service level increases

(impact of customer needs on implied demand uncertainty)

(~causes implied demand uncertainty to...)
increase because the firm now has to handle unusual surges in demand

markdowns are ________ for products with ________ implied demand uncertainty because oversupply often results.

given the ease of changing prices and assortments online, the internet allows a company selling online to manage revenues from its available product portfolio much more _______________ than do traditional channels.

Supply chain decision decisions are typically made for the ________ and are ________ to alter on short notice - firms must take into account uncertainty in anticipated market conditions over the following few years.

long-term (a matter of years);
expensive

For every strategic choice to increase responsiveness, there are additional costs that ________ ________.

For decisions made during the ________ ________ ________ phase, the time frame considered is a quarter to a year. Therefore, the supply chain's configuration determined in the strategic phase is ________ . This configuration establishes constraints within which planning must be done.

supply chain planning;
fixed.

A _______________ in the desired response time _______________ the number of facilities required in the network.

The concept of tailoring to achieve strategic fit is important in industries such as ________ and ______, in which ______ is critical and products move through a life cycle.

high-tech and pharmaceuticals;
innovation.

_______________ is the time that elapses between the point at which material enters the supply chain to the point at which it exits.

For drop-shipping to be effective, there should be _______________ _______________ per order.

Drop-shipping _______________ costs of inventory because of _______________

Order visibility becomes _______________ for distributor storage because there is a single shipment from warehouse to customer and only one stage of supply chain is directly involved in filling the customer order.

The size of the cycle inventory is a result of the _______________ , _______________ , or _______________ of material in large lots.

production,
transportation,
purchase

Returnability is _______________ than it is with manufacturer storage because all returns can be processed at warehouse itself. The customer also has to return only _______________ package, even if the items are from several manufacturers.

Push processes may also be referred to as ________ processes because they respond to speculated (or forecasted), rather than actual, demand.

A firm can introduce a new product much more _______________ online as compared with doing so via physical channels.

Among all the distribution networks, transportation costs are highest for _______________ , especially when delivering to individuals.

Economies of scale are illustrated by
A) a company declaring that they will not have sales, but will maintain very low prices all the time.
B) the price of a taxi ride service increasing after 2 a.m.
C) a supplier using a third party logistics firm.
D) a supplier waiting until enough demand has built up to send a full truckload shipment to their customer.

D) a supplier waiting until enough demand has built up to send a full truckload shipment to their customer.

For manufacturer/distributor storage with customer pickup, order visibility is extremely _______________ for customer pickups. Such a system is _______________ to implement because it requires integration of several stages in supply chain.

3 decision phases in a supply chain

1. supply chain strategy/design
2. supply chain planning
3. supply chain operation

Who does a supply chain do?

A supply chain aims to match supply and demand, profitably, for products and services.

From a facility perspective, distributor storage is _______________ appropriate for _______________ _______________ items.

not;
extremely slow-moving

Product variety for last-mile delivery is somewhat ______________ than for distributor storage with carrier delivery.

In the ________ ________ , the processing in a supply chain are divided into two categories, depending on whether they are executed in response to a customer order or in anticipation of customer orders.

Which component of the supply chain decision-making framework would be used to reach the performance level dictated by the supply chain strategy?
a. Customer strategy
b. Supply chain strategy
c. Supply chain structure
d. Competitive strategy
e. Replenishment strategy

c. Supply chain structure

The cycle view is used by ________ ________ ________ systems to support supply chain operations.

enterprise resource planning (ERP)

The most significant sourcing decision for a firm is

whether to perform a task in-house or outsource it to a third party.

Customer experience/convenience is _______________ with distributer storage because a single shipment reaches customer in response to an order.

For a company to achieve strategic fit, it must accomplish three things:

1. the competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal.
2. the different functions in a company must appropriately structure their processes and resources to be able to execute these strategies successfully.
3. the design of the overall supply chain and the role of each stage must be aligned to support the supply chain strategy.

_______________ refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain.

Order visibility for last-mile delivery is _______________ given that deliveries are made within 24 hours.

The information infrastructure for last-mile delivery is similar to that for _______________ _______________ _______________, however, it requires the additional capability of scheduling deliveries.

distributor storage with package carrier delivery

Compared to manufacturer storage, facility costs (of warehousing) are somewhat _______________ with distributor storage because of a loss of _______________ .

Supply chain planning decisions include

-which markets will be supplied from which locations
-inventory policies to be followed
-subcontracting of manufacturing, backup locations
-timing and size of marketing and price promotions
planned buildup of inventories

two basic types of facilities costs must be included-

1) costs related to the number and location of facilities in a network
2) costs associated with the operations that take place in these facilities

promotion information can be conveyed to customers _______________ and _______________ using the internet as long as the business has access to its customer network.
Group is one company that used social networking online to push promotions to customers.

The main advantages of a network with consumer pickup sites are that it can _______________ the delivery cost and _______________ the set of products sold and customers served online.

With drop-shipping, time to market is _______________ with the product available as soon as the first unit is produced.

________ ________ is the total profit shared across all stages of the supply chain

supply chain profitability

The basic tradeoff supply chain managers face is the cost of holding _______________ lots of inventory (when cycle inventory is _________) versus the cost of _______________ more frequently (when cycle inventory is ______).

Online sales can lower a firm's inventories if it can _______________ the introduction of variety until after the customer order is received.

_______________ is important in the context of manufacture storage, because two stages in the supply chain are involved in every customer order. Failure to provide this capability is likely to have a significant negative effect on customer satisfaction.

Although faster transportation is more expensive, a firm receives which benefit as a result of the faster transportation?

For retail storage with customer pickup, a _______________ information infrastructure is needed if customers walk into the store and place orders.
For online orders, however, a _______________ information infrastructure is needed to provide visibility of the order until the customer picks it up.

The main advantage of in-transit merge over drop-shipping is

A) the ability to reduce cost of inventory by centralizing inventories at the manufacturer.
B) supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated.
C) somewhat lower transportation cost and improved customer experience.
D) order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer.
E) the handling of returns is likely to be simple and inexpensive, improving customer satisfaction.

C) somewhat lower transportation cost and improved customer experience.

The internet and cell phones can enhance the convenience and lower the cost of _______________ _______________ , especially in small amounts.

With in-transit merge, the investment in information infrastructure is _______________ than that for drop-shipping

For retail storage with customer pickup, order visibility is extremely _______________ , but difficult and essential for customer pickups with orders are placed online or by phone, but trivial for in-store orders.

The use of differential pricing over time or customer segments to maximize profits from a limited set of supply chain assets is

Customer experience with in-transit merge is likely to be _______________ than with drop-shipping, because the customer receives only one delivery for an order instead of partial shipments.

Benefit of aggregation is achieved only if the manufacturer can allocate _______________ portion of the available inventory across retailers on an as-needed basis.

_______________ is the ability of customers to track their orders from placement to delivery

Significant investment in _______________ _______________ to integrate manufacturer and retailer.

information infrastructure

The main advantage with retail storage is that is can _______________ delivery costs and provide a _______________ response than other networks.

_______________ is a key driver of the overall profitability of a firm because it affects both the supply chain cost and the customer value directly.

For last-mile delivery, facilities and handling costs are _______________ than manufacturer storage or distributor storage with package carrier delivery, but _______________ than a chain of retail stores.

Capacity (component of facilities decisions)
A facility with _________ excess capacity will likely be more efficient per unit of product it produces than one with a lot of ________ capacity.

Which of the following is a disadvantage of manufacturer/distributor storage with customer pickup?

A) Customer experience is lower than other options because of the lack of home delivery.
B) Response time is similar to package carrier delivery with manufacturer or distributor storage.
C) Returnability is somewhat easier given that pickup location can handle returns.
D) Product availability is similar to other manufacturer or distributor storage options.
E) Facilities costs are lower if existing facilities are used.

A) Customer experience is lower than other options because of the lack of home delivery.

_______ capacity can be used for many types of products but is often _____ efficient

Transportation costs for _______________ _______________ _______________ _______________ are lower than the use of package carriers, especially if using an existing delivery network.

manufacturer/distributor storage with customer pickup

For last-mile delivery, the customer experience can be _______________ particularly for bulky, hard to carry items.

_______________ the number of warehouse locations _______________ the average outbound distance to the customer and makes outbound transportation distance a _______________ of the total distance traveled by the product.

increasing;
decreases;
smaller fraction.

Supply chain profitability is
A) not correlated to the value generated by the various stages of the supply chain.
B) the total profit to be shared across all supply chain stages.
C) the difference between the revenue generated from the customer and the overall cost across the supply chain.
D) the total revenue generated by the distributor stage of the supply chain.
E) B and C only
Answer: E

Answer: E) B and C only

B) the total profit to be shared across all supply chain stages.
C) the difference between the revenue generated from the customer and the overall cost across the supply chain.

Forecasting is ________ accurate when demand has ________ uncertainty.

customer demand from different segments varies along 6 attributes

quantity of product needed one each lot
response time that customers are willing to tolerate
variety of products needed
service level required
price of the product
desired rate of innovation in the product

With drop-shipping, _______________ allows a high level of product variety to be available to the customer because every product at the manufacturer can be made available to the customer without any limited imposed by _______________ .

manufacturer storage;
shelf space

In the planning phase, companies must include uncertainty in ________ , ________ ________ , and ________ over this time horizon in their decisions.

demand;
exchange rates;
competition

The _______________ facility, will have difficulty responding to demand fluctuations.

(~Customer Need...)
variety of products required increases

(impact of customer needs on implied demand uncertainty)

(~causes implied demand uncertainty to...)
increase because demand per product becomes more disaggregate

Toward the beginning stages of a product's life cycle:

1. demand is very uncertain, and supply may be unpredictable.
2. margins are often high, and time is crucial to gaining sales.
3. product availability is crucial to capturing the marking.
4. cost is often a secondary consideration.

Littles Law
I= Inventory
T=flow time
D=throughput

Increases in cost _______ efficiency.

Response time under distributor storage is better than under manufacturer storage because distributor warehouse are, on average, _______________ to customers, and the entire order is _______________ at the warehouse before being shipped.

As long as inbound transportation economies of scale are maintained, _______________ the number of facilities _______________ total transportation cost.

Which distribution network design is being used when the distributor/retailer delivers the product to the customer's home instead of using a package carrier?

A) Manufacturer storage with direct shipping
B) Manufacturer/distributor storage with customer pickup
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
E) Retail storage with customer pickup

D) Distributor storage with last mile delivery

Under Distributor storage with Carrier Delivery, inventory is not held by manufacturers at the factories, but by _______________ in intermediate warehouses, and package carriers are used to transport products from the _______________ to the final customer.

distributors/retailers;
intermediation location

________ processes operate in an uncertain environment because customer demand is not yet known.

With regard to ongoing operating costs, customer participation in selection and order placement allows company selling online to _______________ its resource costs relative to staffing retail stores.

________ typically measures the cost of bringing product into a facility as a percentage of sales or cost of goods sold (COGS).

Average inbound transportation cost

_______________ _______________ _______________ is when product is shipped directly from the manufacturer to the end customer, bypassing the retailer (who takes the order and initiates the delivery request).
Also referred to as _______________ .

Manufacturer storage with Direct Shipping;
Drop-shipping

The two major types of facilities are

production sites and storage sites

________ refers to what each process or function will try to do particularly well.

Supply chain efficiency is

the inverse of the cost of making and delivering a product to the customer.

Performance of a distribution network is evaluated along what two dimensions?

1. Value provided to the customer
2. cost of meeting customer needs

_______________ is inventory held in case demand exceeds expectations it is held to counter uncertainty.

Supply chain operation activities include

-allocate inventory or production to individual orders
-set order fulfillment due dates
-generate pick lists at a warehouse
-allocate an order to a particular shipping mode and shipment
-set delivery schedules of trucks
-place replenishment orders

The process by which a firm decides how much to charge customers for its goods and services is

seasonal inventory should be used when

a company can rapidly change the rate of its production system at a very low cost.

The supply chain begins with

a customer request/demand

Which distribution network design is similar to pure drop-shipping, except that pieces of the order coming from different locations are combined so that the customer gets a single delivery?

A) Manufacturer storage with direct shipping
B) Manufacturer storage with direct shipping and in-transit merge
C) Distributor storage with package carrier delivery
D) Distributor storage with manufacturer pickup
E) Retail storage with customer pickup

B) Manufacturer storage with direct shipping and in-transit merge

Returnability for last-mile delivery is _______________ to implement than other precious options. But returns _______________ and _______________ to handle in this manner than at a retail store, where a customer can bring the product back.

easier;
harder;
more expensive

_______________ is built up to counter predictable seasonal variability in demand.

In general, managers should aim to _______________ inventory in ways that do not _______________ cost or _______________ responsiveness.

Which of the following characteristics of customer demand have a correlation with implied uncertainty?
a. Product margin
b. Average forecast error
c. Average stockout rate
d. Average forced season end markdown
e. all of the above

A supply chain aims to achieve higher profits by having the right:

the right product
+
the right price
+
the right store
+
the right quantity
+
the right customer
+
the right time

Given a shorter time frame and better forecasts than in the design phase, companies in the planning phase try to incorporate any ________ built into the supply chain in the design phase and exploit it to optimize ________ .

As the product becomes a commodity product later in its life cycle, the demand and supply characteristics change. At this stage, it is typically the case that:

1. demand has become more certain, and supply is predictable.
2. margins are lower as a result of an increase in competitive pressure.
3. price becomes a significant factor in customer choice.

For in-transit merge, facility and processing costs for the manufacturer and retailer are _______________ to those for drop-shipping

_______________ allows a new product to be available to the market on the day the first unit is produced.

________ ________ ________ ________ is the management of supply chain assets and product, information, and fund flows to grow the total supply chain surplus.
A growth in supply chain surplus increases the size of the total pie, allowing contributing members of the supply chain to benefit.

effective supply chain management

_______________ is the probability of having a product in stock when a customer order arrives

A _______________ facility performs a given set of functions (e.g., fabrication or assembly) on many types of products.

Supply chain ________ , ________ , and ________ decisions play a significant role in the success or failure of a firm. To stay competitive, supply chains must adapt to changing technology and customer expectations.

design;
planning;
operation

During the ________ ________ ________ phase, a company decides how to structure the supply chain and what processes each stage will perform

supply chain strategy/design

Given its performance characteristics, manufacturer storage with in-transit merge is best suited for _______________ demand, _______________ items the retailer is sourcing from a limited number of manufacturers.

low- to medium;
high-value

For retail storage with customer pickup, _______________ depends on whether or not the customer likes to shop and whether shopping is viewed as a positive or negative experience by customer.

A ________ and ________ strategy specifies how the market will be segmented and how the product will be positioned, priced, and promoted.
-Market Segmentation; Product Position; Pricing; Promotions

Supply chain success is measured by ________ supply chain profitability, not profits at an individual stage. Successful if all stages make profit, not successful is some don't.

A push/pull view of the supply chain is very useful when considering strategic decisions related to ________ ________ ________ .
The goal is to identify an push/pull boundary such that the supply chain can match supply chain and demand effectively.

With _______________ _______________ _______________, inventory is stored at the manufacturer or distributor warehouse, but customers place their orders online or on the phone and then travel to designated pickup points to collect their merchandise. Orders are shipped from the storage site to the pickup points as needed.

manufacturer or distributor storage with customer pickup

An online seller can share demand information throughout its supply chain to improve _______________ . The internet may also be used to share planning and forecast information within the supply chain, further improving coordination. This helps _______________ overall supply chain costs and better match supply and demand.
Information is an enabler of many of the benefits of online sales.

One of the biggest challenges to maintaining strategic fit is the ______ in product variety and the _______ in the life cycle of many products.

Which component of the supply chain decision-making framework would be established first?
a. Customer strategy
b. Supply chain strategy
c. Supply chain structure
d. Competitive strategy
e. Replenishment strategy

Most companies are best served by a _______________ of delivery networks. The combination used depends on _______________ _______________ and the strategic position that the firm is targeting.

combination;
product characteristics

With in-transit merge, facilities and handling costs are _______________ than drop-shipping at the carrier; and receiving costs _______________ at customer.

Implied demand uncertainty is the resulting uncertainty for only the position of the demand that the supply chain plans to satisfy based on the ________ the ________ desires.

With direct shipping, the retailer carries _______________ inventory
Information flows from the customer, via the retailer, to the manufacturer, and product is shipped directly from the manufacturers to customers.

Returnability is _______________ with online orders, which typically arrive from a centralized location. The proportion of returns is also likely to be much _______________ for online orders because customers are unable to touch and feel the product before their purchase. Going online thus increases the cost of _______________ .

harder;
higher;
reverse flows

A the operational level, supply chain configuration is considered ________ and planing polices are already ________ .

_______________ is the number of different products or configurations that are offered by the distribution network.

Step 1. understand the customer and supply chain uncertainty

understand the customer wishes
understand the capabilities of your supply chain
match the wishes with the capabilities

-challenge: how to meet extensive wishes with limited capabilities

To _______________ inventory costs, firms try to _______________ and _______________ the number of facilities in their supply chain network.

decrease;
consolidate;
limit

Time to market under distributor storage is somewhat _______________ than that under manufacturer storage because of the need to stock another stage in the supply chain.

________ is the set of business processes required to purchase goods and services.

Access to online sales is limited only by the customers' _______________ to the internet

Online sales affect customer experience in terms of _______________ , _______________ , and _______________ .

access;
customization;
convenience

All flows of information, product, or funds generate ________ within the supply chain

_______________ is the average amount of inventory used to satisfy demand between receipts of supplier shipments.

Which of the following are technologies that share and analyze information in the supply chain?
A) Electronic Data Interchange (EDI)
B) Internet
C) Enterprise Resource Planning (ERP)
D) Supply Chain Management (SCM) software
E) all of the above

For inventory, drop-shipping provides large benefits if _______________ can be postposed at the manufacturer until after a customer has placed an order.

The process of designing a distribution network has two broad phases.
In the first phase, the _______________ of the supply chain network is visualized. This phase decides the _______________ _______________ in the supply chain and the role of each stage.

broad structure;
number of stages;

Unlike package carrier delivery, _______________ requires the distributor warehouse to be much closer to the customer.

Greater product variety and shorter life cycles _____ uncertainty while _______ the window of opportunity within which the supply chain can achieve fit.

For drop-shipping, the benefits from centralization are highest for _______________ , _______________ items with _______________ demand.

high-value;
low-demand;
unpredictable

Which distribution network design is being used when inventory is stored locally at retail stores and customers walk into the retail store or place an order online or on the phone and pick it up at the retail store?

A) Manufacturer storage with direct shipping
B) Manufacturer/distributor storage with customer pickup
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
E) Retail storage with customer pickup

E) Retail storage with customer pickup

Products requiring high responsiveness may be manufactured using a ______ ______, whereas products requiring less responsiveness may be manufactured using a _____ _____ but ____ ____ ____.
The mode of transportation used in both cases, however, may be the same.
In other cases, some products may be held at regional warehouses close to the customer, whereas others may be held in a centralized warehouse far from the customer.

flexible process;
less responsive but more efficient process.

Transportation costs are somewhat _______________ for distributor storage compared to those for manufacturer storage because an economic mode of transportation (e.g., truckloads) can be employed for _______________ to the warehouse, which is closer to the customer.

Inventory also has a significant impact on the ______ ______ _______ in a supply chain.

Location (component of facilities decisions)
A basic trade-off here is whether to _______ to gain economies of scale or to _________ to become more responsive by being closer to the customer.

supply chain surplus will always be a little higher than

supply chain profitability

The major hurdle for manufacturer/distributor storage with customer pickup is the _______________ handling cost and complexity at the pickup site. Such a network is likely to be most effective if existing retail locations are used as pickup sites, because this type of network improves the _______________ from existing infrastructures.

_______ measures the average time between when an order is placed and the product arrives.

Each firm should have _______________ _______________ of facilities that _______________ total logistics costs.

at least the number;
minimizes

Components of facilities Decisions

Role
Location
Capacity
Manufacturing Methodology
Warehousing methodology

With drop-shipping, order visibility is _______________ but also more _______________ from a customer service perspective.

For _______________ facilities, firms must decide on the products to be stored at each facility.

A supply chain strategy involves decisions regarding
a. inventory.
b. transportation.
c. operating facilities.
d. information flows.
e. all of the above
Answer: e

Another difference among cycles relates to the ________ of an order.
A customer buys a single car, but the dealer orders multiple cars at a time from the manufacturer, and the manufacturer, in turn, orders an even larger quantity of tires from the supplier.
As we move from customer to the supplier, the number of individual orders ________ and the size of each order ________ .
Thus, sharing of information and operating policies across supply chain stages becomes more important as we move further from the end customer.

The supply chain includes not only the manufacturers and suppliers, but also transporters, warehouses, _______________, and even _______________ themselves.

_______________ refers to the distributor/retailer delivering the product to the customer's home instead of using a package carrier.

the rest of the supply chain surplus becomes ________ , the difference between the revenue generated from the customer and the overall cost across the supply chain.

supply chain profitability

Which distribution network design is being used when inventory is stored at the manufacturer or distributor warehouse but customers place their orders online or on the phone and then come to designated pickup points to collect their orders?

A) Manufacturer storage with direct shipping
B) Manufacturer/distributor storage with customer pickup
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
E) Retail storage with customer pickup

B) Manufacturer/distributor storage with customer pickup

The relative proportion of push and pull processes can have an impact on supply chain ________ .

Supply chain responsiveness includes a supply chain's ability to do the following:

-respond to wide ranges of quantities demanded
-meet short lead times
-handle a wide variety of products
-build highly innovative products
-meet a high service level
-handle supply uncertainty

Last-mile delivery may be justifiable if customer orders are _______________ to provide some economies of scale and customers are willing to pay for this convenience.

In _______________ _______________ , often viewed as the most traditional type of supply chain, inventory is stored locally at retail stores.
Customers walk into the retail sore or place an order online or by phone and pick it up at the retail store.

retail storage with customer pickup

In-transit merge is best implemented if there are no more than _______________ sourcing locations.

Which of the following is a technology that shares and analyzes information in the supply chain?
A) Internet
B) Enterprise Data Planning (EDP)
C) Electronic Resource Interchange (ERI)
D) Chain Management (CM) software

a) internet

(B- EDP wrong, would be ERP)
(C- ERI wrong, would be EDI)
(D-CM software wrong- would be SCM software)

In areas with _______________ labor costs, it is hard to justify last-mile delivery to individual consumers on the basis of efficiency or improved margin.

The ________ ________ strategy determines the nature of material procurement; transportation of materials; manufacture of product or creation of service; distribution of product

Online sales affect the cost of _______________ , _______________ , _______________ , and _______________ . It is important to observe that the impact in each case is not necessarily positive.

inventory;
facilities;
transportation;
information

________ ________ reflects the uncertainty of customer demand for a product

The value of setting up online sales is ______ _____ ____ in every industry.

For warehouses and DCs, firms must decide whether they will be primarily _______________ facilities or _______________ facilities.

For drop shipping, the benefits of aggregation are small for items with _______________ demand and _______________ value.

outbound transportation costs per unit tend to be _______________ than inbound costs because inbound lot sizes are typically _______________ .

Supply chains range from those that focus solely on ____ ______ to those that focus on a goal of producing and supplying at the ______ possible cost.

If a firm wants to reduce response time to its customers further, it may have to

increase the number of facilities beyond the point that minimizes logistics costs.

Increased processing costs and potential errors at the pickup site are the biggest hurdle for the success of _______________ _______________ _______________ _______________

manufacturer/distributor storage with customer pickup

the difference between the value of the product and its price remains with the customer as

When all the different stages of a supply chain work toward the objective of maximizing total supply chain profitability, rather than each stage devoting itself to its own profitability without considering total supply chain profit, it is known as

supply chain coordination

Products with uncertain demand are often ________ mature and have ________ direct competition. As a result, margins tend to be ________ .

_______________ are the sum of inventory, transportation, and facility costs for a supply chain network.

A company selling online can _______________ network facility costs by _______________ operations, thereby decreasing the number of facilities required.

Online sales can also lower a firm's order _______________ because it does not have to fill an order as soon as it arrives.

_______________ includes the ease with which customers can place and receive orders and the extent to which this experience is customized. it also includes purely experiential aspects, such as the possibility of getting a cup of coffee and the value that the sales staff provides.

Three steps to achieving strategic fit

1. understand the customer and supply chain uncertainty
2. understand the supply chain capabilities
3. achieving strategic fit

A network designed needs to consider _______________ _______________ as well as _______________ _______________ when deciding on the appropriate delivery network.

product characteristics;
network requirements

For manufacturer/distributor storage with customer pickup, processing costs at the manufacturer or warehouse are _______________ to those of other solutions. Processing costs at the pickup site are _______________ because each order must be matched wit a specific customer when he or she arrives. Creating this capability can _______________ processing/handling costs significantly if appropriate storage and information systems are not provided.

The time horizon in the supply chain operation phase is ________ or ________ .

Firms must also decide whether to design a facility with a _______ focus or a ______ focus.

Given the constraints establish by the configuration and planning policies, the goal during the operation phase is to exploit the ________ of uncertainty and ________ performance.

A _______ level of product availability provides a ______ level of responsiveness but __________ cost because much inventory is held but rarely used.

From an inventory perspective, warehouse storage with last mile delivery is suitable for relatively _______________ items that are needed _______________ and for which some level of _______________ is beneficial.
Autoparts required by car dealers fit this description.

fast-moving;
quickly;
aggregation

Compared to drop-shipping, in-transit merge requires a _______________ demand from each manufacturer (non necessarily each product) to be effective.

As the number of facilities in a supply chain _______________, the required inventory _______________ .

when selling physical products that cannot be downloaded, customer requests take _______________ to fulfill through online sales than in retail store because of the _______________ time involved.
There is no delay, however, for _______________ .

longer;
shipping;

information goods

customer value
-
supply chain cost

the objective of every supply chain should be to ________ overall ________ generated.

With manufacturer/distributor storage with customer pickup, transportation cost is _______________ than for any solution using package carriers because significant aggregation is possible when delivering orders to a pickup site. This allows the use of truck-load or less-than-truckload carriers to transport orders to the pickup site.

Inventory costs using manufacturer/distributor storage with customer pickup can be kept _______________ , with either manufacturer or distributor storage to exploit aggregation.

A supply chain is ________ and involves the constant flow of ________ , ________ , and ________ among different stages.

dynamic;
information;
product;
funds

Receiving costs at the customer are _______________ because a single delivery is received.

A _______ level of product availability ________ inventory holding costs but results in a ____________ fraction of customers who are not served on time.

With retail storage with customer pickup, local storage _______________ inventory costs because of the lack of aggregation.
For fast- to very-fast-moving items, however, there is a marginal increase in inventory, even with local storage.

A higher level of inventory also facilitates a _______________ in production and transportation costs because of improved _______________ in both functions. This choice _______________ inventory holding cost.

reduction;
economies of scale;
increases

Because operational decisions are being made in the short term (minutes, hours, or days), there is ________ uncertainty about demand information.

Which component of the supply chain decision-making framework would be established second?
a. Customer strategy
b. Supply chain strategy
c. Supply chain structure
d. Competitive strategy
e.. Replenishment strategy

With drop-shipping, its easy to provide a _______________ level of product variety.

The distributor warehouse serves as a _______________ between the customer and manufacturer, _______________ the need to coordinate the two completely.

Manufacturer storage is suitable if it allows the manufacturer to _______________ _______________, thus reducing inventories.
It is thus ideal for _______________ that are able to build to order.

postpone
customization;
direct sellers

A company selling online incurs additional _______________ to build and maintain the information infrastructure.

(~Customer Need...)
Range of quantity required increases

(impact of customer needs on implied demand uncertainty)

(~causes implied demand uncertainty to...)
increase because a wider range of the quantity required implies greater variance in demand

The goal is to target high responsiveness for a supply chain facing __________________, and efficiency for a supply chain facing ________________.

high implied uncertainty;
low implied uncertainty.

The detailed process description of a supply chain in the cycle view is useful when considering ________ ________ because it clearly specifies the roles and responsibilities of each member of the supply chain and the desired outcome for each process.

The major disadvantage of in-transit merge is the additional effort during the _______________

For retail storage with customer pickup, product variety is _______________ than that under all the other options.

During the supply chain operation phase, companies make decisions regarding ________ ________ orders.

27) In which distribution network design is product shipped directly from the manufacturer to the end customer, bypassing the retailer (who takes the order and initiates the delivery request)?
A) Manufacturer storage with direct shipping
B) Manufacturer storage with direct shipping and in-transit merge
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
E) Manufacturer/distributor storage with customer pickup

A) Manufacturer storage with direct shipping

The handling of returns is _______________ under drop-shipping because each order may involve shipments from more than one manufacturer.

The ________ ________ of the supply chain clearly defines the processes involved and the owners of each process.

As with drop-shipping, the ability to _______________ inventories and postpone product customization is a significant advantage of _______________ .

aggregate;
in-transit merge

A ________ ________ strategy specifics the portfolio of new products that a company will try to develop. It also dictates whether the development efforts will be made internally or outsourced.
-Product portfolio: timing of development and release

_______________ levels of inventory improve _______________ but may result in lost sales if customers are unable to find products they are ready to buy.

Supply chains save on the _______________ of facilities when using drop-shipping because all inventories are _______________ at the manufacturer.

Manufacturer storage with direct shipping and in-transit merge _______________ pieces of the ordering coming from different locations so the customer gets a _______________ delivery.

With direct shipping, response times tend to be _______________ because the order must be transmitted from the retailer to the manufacturer and shipping distances are generally longer from the manufacturer's centralized site.

a supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request.

Order tracking becomes harder to implement in a drop-ship system because it requires _______________ of information systems at both the _______________ and the _______________.

complete integration;
retailer;
manufacturer.

The information infrastructure needed for distributor storage is significantly _______________ than that needed with manufacturer storage.

Given the five stages of a supply chain, all supply chain processes can be broken down into four process cycles:

-customer order cycle
-replenishment cycle
-manufacturing cycle
-procurement cycle

For manufacturer/distributor storage with customer pickup, facility costs are _______________ if new facilities have to be built and _______________ if existing facilities are used.

Real-time visibility between customers and the warehouse is _______________, whereas real-time visibility between the customer and manufacturer is _______________ .

supply chain value is highly correlated to

supply chain profitability.

Which of the following is a disadvantage of distributor storage with carrier delivery?

A) Information infrastructure is simpler than manufacturer storage.
B) Response time is faster than with manufacturer storage.
C) Returnability is easier than with manufacturer storage.
D) Product variety is lower than with manufacturer storage.
E) Transportation cost is lower than with manufacturer storage.

D) Product variety is lower than with manufacturer storage.

Distributor storage has a _______________ product variety than manufacturer storage.

With in-transit merge, transportation costs are somewhat _______________ than drop-shipping

From an inventory perspective, distributor storage makes sense for products with _______________ demand.

For retail storage with customer pickup, _______________ response times can be achieved with this system because of local storage and same-day (immediate) pickup possible.

An efficient supply chain lowers costs by

eliminating some of its responsiveness.

For retail storage with customer pickup, retainability is _______________ than other options because returns can be handled at the pickup site and can provide a substitute.

Which of the following is a disadvantage of retail storage with customer pickup?

A) Returnability is easier than other options given that pickup location can handle returns.
B) Inventory cost is higher than all other options.
C) Transportation cost is lower than all other options.
D) Facilities and handling costs are lower than other options.
E) Product variety is higher than all other options.

B) Inventory cost is higher than all other options.

Lowest cost is defined based on ________ _________; not every firm is able to operate on the efficient frontier, which represents the cost responsiveness performance of the ____ ____ ____.

existing technology;
best supply chains.

The primary purpose of any supply chain is to satisfy ________ ________ and, in the process, generate profit for itself

(~Customer Need...)
rate of innovation increases

(impact of customer needs on implied demand uncertainty)

(~causes implied demand uncertainty to...)
increase because new products tend to have more uncertain demand

A _______________ tends to result in more expertise about a particular type of product at the expense of the __________ expertise that comes from a _______________ methodology.

product focus;
functional;
functional

Processing and handling costs are comparable to those of manufacturer storage unless the factory is able to ship to the end customer directly from the production line. In that case, distributor storage has _______________ processing costs.

A firm already on the efficient frontier can improve its responsiveness only by _____ _______ and becoming _____ ________.
Such a firm must then make a trade-off between efficiency and responsiveness.

increasing cost;
less efficient.

the internet has significantly _______________ the cost of "transporting" information goods in digital form.
For nondigital products, aggregating inventories _______________ outbound transportation relative to inbound transportation.

High levels of inventory in an apparel supply chain _______________ _______________ but also leave the supply chain vulnerable to the need for markdowns, lowering profit margins.

Which of the following supply chain capabilities will cause supply uncertainty to increase?
a. Frequent breakdowns
b. Unpredictable and low yields
c. Poor quality
d. Limited supply capacity
e. inflexible supply capacity
f. evolving production process.
g. al of the above

When there are too many sources, _______________ can be difficult to coordinate and implement.

In some instances, _______________ of product differentiation can be implemented with distributor storage, but it does require that the warehouse develop some _______________ capability.

With distributor storage, warehouse storage _______________ to some extent the variety of products that can be offered.

Examples of responsive supply chains

Seven-Eleven
W.W. Grainger.

The ________________________ shows the lowest possible cost for a given level of responsiveness.

Cost-responsiveness efficient frontier curve

Transportation cost for retail storage with customer pickup is much _______________ than with other solutions because inexpensive modes of transport can be used to replenish product at the retail store.

The biggest advantage of drop-shipping is the ability to _______________ inventories at the manufacturer, which can _______________ demand across all retailers that it supplies.
As a result, the supply chain is able to provide a _______________ level of product availability with _______________ levels of inventory.

centralize;
aggregate;

high;
lower

The second phase of designing a distribution network takes the broad structure and converts it into specific locations and their _______________ , _______________ , and _______________ .

capability;
capacity;
demand allocation

________ processes are initiated by a customer order

Which of the following is a disadvantage of distributor storage with last mile delivery?

A) Transportation cost is higher than any other distribution option.
B) Information cost is similar to distributor storage with package carrier delivery.
C) Customer experience is very good, particularly for bulky items.
D) Returnability is easier to implement than other options.
E) Order traceability is less of an issue and easier to implement than manufacturer storage or distributor storage with package carrier delivery.

A) Transportation cost is higher than any other distribution option.

Components of inventory decisions

cycle inventory
safety inventory
seasonal inventory
level of product availability

Overall supply chain facility and handling costs are somewhat _______________ with in-transit merge than with drop-shipping.

Which of the following is an advantage of distributor storage with carrier delivery?

A) Inventory cost is higher than with manufacturer storage.
B) Product variety is lower than with manufacturer storage.
C) Order visibility for the customer is easier than with manufacturer storage.
D) Higher cost to provide the same level of product availability as manufacturer storage.
E) Cost of facilities and handling is somewhat higher than manufacturer storage.

C) Order visibility for the customer is easier than with manufacturer storage.

Pull processes may also be referred to as ________ processes because they react to customer demand.

______ capacity can be used for only a limited number of products but is _____ efficient.

For inventory, drop-shipping has the highest benefits for _______________ , _______________ items.

For _______________ items, inventory turns can _______________ by a factor of six or higher if drop-shipping is used instead of storage at retail stores.

Visibility between the distributor warehouse and manufacturer can be achieved at a much _______________ cost than real-time visibility between customer and manufacturer.

(~Customer Need...)
lead time decreases

(impact of customer needs on implied demand uncertainty)

(~causes implied demand uncertainty to...)
increase because there is less time in which to react to orders

Of all the options discussed, returnabiltiy is best with _______________ , because trucks making deliveries can also pick up returns from customers.

Profitability of a delivery network is determined by revenue from _______________ and network costs.

Companies in the same industry often select very different distribution networks because
A) some companies are poorly run.
B) different companies try to avoid using the same approach.
C) different companies have different objectives for their supply chain.
D) all of the above
E) none of the above

C) different companies have different objectives for their supply chain.

Compared to a business with many retail outlets, an online seller aggregated inventories tends to have _______________ transportation costs (across the entire supply chain) per unit because of the increases _______________ costs.

_______________ are the costs of sending material out of a facility.

outbound transportation costs

Each cycle starts with the supplier marketing the product to customers. A buyer then places an order that is received by the supplier. The supplier supplies the order, which is received by the buyer. The buyer may return some of the product or other recycled material to the supplier or a third party. The cycle of activities then begins again.

These subprocesses can be linked to the source, make, deliver, and return processes in the supply chain operations reference (SCOR) model.

Each cycle consists of ________ subprocesses.

Appropriate tailoring of the supply chain helps a firm achieve varying levels of _______ for a ___________.

responsiveness;
low overall cost.

processes executed in anticipation of a customer order.
work release based on downstream demand forecasts

proactive- keeps inventory to meet actual demand

In-transit merge has the greatest benefits for products with _______________ whose demand is _______________ to forecast, particularly if _______________ can be postponed.

high;
difficult;
product customization

The major disadvantage of in-transit merge compared to drop-shipping is

A) transportation costs are high because the average outbound distance to the end consumer is large and package carriers are used to shipping the product.
B) response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer's centralized site.
C) order tracking becomes harder to implement because it requires complete integration of information systems at both the retailer and the manufacturer.
D) the additional effort during the merge itself.
E) the handling of returns is likely to be difficult and more expensive, hurting customer satisfaction.

D) the additional effort during the merge itself.

Why might a company fail?

A lack of strategic fit.
or
Its processes and resources do not provide the capabilities to execute the desired strategy.

W.W. Grainger holds ________ with ______ implied demand uncertainty in a centralized warehouse.

processes executed in response to a customer order.
work release based on actual demand or the actual status of the downstream customers.

Reactive- may cause long delivery lead times

________ ________ requires that both the competitive and supply chain strategies of a company have aligned goals.
It refers to consistency between the customer priorities that the competitive strategy hopes to satisfy and the supply chain capabilities that the supply chain strategy aims to build.

_______________ is the ease with which a customer can return unsatisfactory merchandise and the ability of the network to handle such returns.

A company's ________ ________ defines, relative to its competitors, the set of customer needs that it seeks to satisfy through its products and services.

A supply chain strategy includes
a) supplier strategy.
b) operations strategy.
c) logistics strategy.
d) all of the above
e) none of the above

d) all of the above

supplier strategy,
operations strategy,
logistics strategy

Time to market for last-mile delivery is slightly _______________ than for distributor storage with package carrier delivery because the new product has to penetrate deeper before it is available to the customer.

The main advantages of in-transit merge over drop-shipping are _______________ transportation cost and _______________ customer experience.

Distributor storage provides _______________ on the transportation for _______________ items relative to manufacturer storage.

For retail storage with customer pickup, facility costs are _______________ because many local facilities are required.

With drop-shipping, it is _______________ to provide a high level of ______________ because of aggregation at manufacturer.

easy;
product availability

A supply chain is a sequence of processes and flows that take place within and between different stages and combine to fill a customer need for a product.
There are two ways to view the processes performed in a supply chain:

-cycle view
-push/pull view

The introductory phase of a product's life cycle corresponds to a ______ implied uncertainty, given the ______ demand uncertainty and the need for a ____ level of product availability.
In such a situation, ______ is the most important characteristic of the supply chain.

high, high, high;
responsiveness.

for any supply chain, there is only one source of revenue ________

The ________ strategy results in a peak during the discount week, often followed by a steep drop in demand during the following weeks.

For manufacturer/distributor storage with customer pickup, time to market can be as _______________ as with manufacture storage options

The later stages of a product's life cycle corresponds to _____ level of implied uncertainty. As a result, the supply chain must change.
In such a situation, ________ becomes the most important characteristic of the supply chain.

The goal of supply chain operations is to handle incoming customer orders as ________ as possible

Last-mile delivery is _______________ to justify when the customer is a business like an auto dealer purchasing large quantities

At _______________ facilities, inbound trucks from suppliers are unloaded, the product is broken into smaller lots and is quickly loaded onto store-bound trucks.
Each store-bound truck carries a wide variety of products, some from each inbound truck.

As the number of facilities _______________, total logistics costs first _______________ and then _______________.

increases;
decrease;
increase

With drop-shipping, there are _______________ transportation costs because of _______________ distance and _______________ shipping.

This loss in _______________ of outbound transportation also _______________ costs.

higher;
increased;
disaggregate..

aggregation;
increases

By aggregating its inventory, a company selling online _______________ product availability. Better information on customer _______________ also allows firms selling online to improve availability.

Example of efficient supply chain
(focuses on efficiency rather than responsiveness)

________ ________ ________ is demand uncertainty imposed on the supply chain because of the customer needs it seeks to satisfy

implied demand uncertainty

A ________ ________ strategy determines the nature of procurement of raw materials, transportation of materials to and from the company, manufacture of the product or operation to provide the service, the distribution of the product to the customer, along with any follow-up service and a specification of whether these processes will be performed in-house or outsourced.

Given the trade-off between cost and responsiveness, a key strategic choice for any supply chain is the level of ________ it seeks to provide.

unlike manufacturer storage, under which multiple shipments may need to go out for a single customer order with multiple items, distributor storage allows outbound orders to the customer to be _______________ _______________ _______________ shipment, further _______________ transportation costs.

bundled into a single;
reducing

Step Three to achieving strategic fit

Ensure that the degree of supply chain responsiveness is consistent with the implied uncertainty.

The choice of distribution network can achieve supply chain objectives ranging from _______________ to _______________ .

low cost;
high responsiveness

Companies start the planning phase with the forecast for the ________ ________ of demand and other factors, such as costs and prices in different markets.

Blue Nile is an online retailer of diamonds that has used responsive transportation to ship diamonds to customers in the United States, Canada, and several countries in Europe and Asia. Which is the mode of transportation used with this strategy?

________ processes operate in an environment in which customer demand is known.
They are, however, often constrained by inventory and capacity decisions that were made in the push phase.

A company selling online finds it _______________ to offer a _______________ selection of products than a brick-and-mortar store.

For retail storage with customer pickup, it is more _______________ than with all other options to provide a _______________ level of product availability.

Which distribution network design is being used when the distributor retailer delivers the product directly to the customer's home?

Distributor storage can handle somewhat lower variety than manufacturer storage but can handle a much higher level of variety than a chain of retail stores. Last mile delivery refers to the distributor / retailer delivering the product to the customer's home instead of using a package carrier.

In which distribution network design is product shipped directly from the manufacturer to the end customer bypassing the retailer?

1. Manufacturer Storage with Direct Shipping. In this case, the manufacturer ships the commodity directly to the end customer, bypassing the retailer, who takes the order and initiates the delivery. This is also known as dropshipping.

Which of the following are the options for a distribution network?

Design Options for a Distribution Network.
Manufacturer storage with direct shipping..
Manufacturer storage with direct shipping and in-transit merge..
Distributor storage with package carrier delivery..
Distributor storage with last mile delivery..
Manufacturer / distributor storage with costumer pickup..

What needs to be considered in the design of a distribution network?

When defining the structure of a distribution network, the most crucial factors are the product demands of the end customer, customer experience, product variety and product availability, response time, and product returnability.