CHAPTER 1 2
Discussion Questions
Consider the purchase of a can of soda at a convenience store. Describe the various stages
in the supply chain and the different flows involved.
When a customer purchases a soda at a convenience store it is the end of the supply chain
because the item has been delivered and purchased. After the transaction the information that is
collected goes in a different direction. Since an item has been purchased that lowers the stock.
So, the next thing the retailer must do is order more from the distributor to replenish what has
been purchased. This moves the information up the supply chain so that the sodas can be moved
back down. When the distributor fills the order, that gives the retailer the opportunity to move
money up the supply chain. After this is done, the distributor gives the information and the
revenue to the manufacturers of the product. These are the people that produce the item and
pushes it down the supply chain to the distributor. The manufacturer gives that information to
suppliers. In return the suppliers give material to be used in the process of production.
Why should a firm such as Dell take into account total supply chain profitability when
making decisions?
The success of Dell comes from the supply chain because they can meet their quota and
still have products left over. The supply is over the demand. Dell also realizes that they could
possibly lose their competitive edge if their suppliers weren’t overachieving. Dells supply chain
can only survive if the members do what need to be done and do it accurately and quickly. They
also must look at the global worldview and not the local worldview. Everyone must be on the
same page so that the supply chain can stay strong.
CHAPTER 1 3
What are some strategic, planning, and operational decisions that must be made by an
apparel retailer such as Gap?
When dealing with strategic decisions the GAP would have to decide where they will
place their distribution center. The centers must be placed in an environment where the materials
can get there in a short amount of time. This makes for shorter shipping times when the items are
being distributed to their proper locations. Planning would represent how much product will be
at each location. The GAP must look at how big the location is and how much material is being
sold out of that location and how much business the location does. The operational decision is
how often orders will be replenished. The GAP would have to check the flow of the apparel.
They learn what is going out, so they know how much they need to replenish. Documents can
show what is their top selling item and what is not selling as well.
Consider the supply chain involved when a customer purchases a book at a bookstore.
Identify the cycles in this supply chain and the location of the push/pull boundary.
The process of the supply chain consists of four cycles that connect the supply chain and
keeps it flowing. These are the customer order cycle, the replenishment cycle, the manufacturing
cycle, and the procurement cycle. The customer order cycle is the connection that happens
between the consumer and the retailer they are purchasing from. The replenishment cycle creates
a connection with the retailer and the distributors. This is because the retailer needs the product
from the distributor, so the stock is full. The manufacturing cycle creates a connection between
the manufacturer and the distributor. When it is alerted, that books are in demand that will make
the distributors clear their warehouses that in turn will alert manufacturers to print more books
for the warehouses. The procurement cycle creates a connection with the manufacturer and the
CHAPTER 1 4
supplier. The materials needed to create the book begin to be produced so the supply chain can
start again. When a book is purchased from the bookstore the supply chain starts up again. This
involves the procurement, manufacturing, distribution, then replenishing, and lastly the delivery.
The stages of supply chain show the involvement of the five people that are involved. The
bookstore serves as the retailer in the supply chain.
When a pull process is initiated, it is because a customer has placed an order. Push
processes are initiated with the anticipation that the customer might order the product. The
push/pull boundary separates the two. The push/pull boundary occurs at a bookstore between the
four process cycles. The customer order cycle is the only pull process because this happens after
the customer has arrived and is ready to purchase a book. The other three cycles are a part of the
push process because they happen before the customer even gets to the bookstore because the
inventory is there waiting to be brought.
Consider the supply chain involved when a customer orders a book from Amazon. Identify
the push/pull boundary and two processes each in the push and pull phases.
The push process includes procurement. This is where Amazon receives books from the
distributors because of the anticipation of customer demand. This is done through forecasting
and planning to make sure that there are enough books available in the warehouses, Warehouses
are also included in the push process as well. The books are in the warehouses that are placed in
certain locations so that they can be delivered to customers in a timely manner. Books are
received and sorted then they remain in the warehouse until the demand is called for.
Order fulfillment is a pull process that happens when a consumer places an order to buy a
book. Then the order is picked and packed and ready to be shipped. This is driven by demand of
CHAPTER 1 5
the book because the consumer ordered it. Transportation is a pull process because the book is
being shipped from the warehouse to the consumer’s home. Amazon has different lanes of
transportation which includes their own delivery trucks, third parties and local partners to make
sure the order reaches the customer.
In what way do supply chain flows affect the success or failure of a firm such as Amazon?
List two supply chain decisions that have a significant impact on supply chain profitability.
Two supply chain decisions that impact the profitability of the supply chain are
transportation and location of warehouses. These supply chain flows can lead to Amazon not
being as successful as they could be. Profitability is lost because the transportation of material is
not included in the supply chain process. Amazon also doesn’t have enough warehouses that are
in areas that are near the customers that shop with them. Amazon could see more success if they
were to build more warehouses, so they aren’t overcrowded with too much product.
Transportation would have to be included in the supply chain because they would be delivering
to more warehouses.
List some of the strategic, planning, and operational decisions that an automotive
manufacturer must make with regards to its supply chain
The strategic decisions for automotive manufacturers include creating the supply chain
and crafting the design of the network. Also studying how the goods are moving through the
distributors and suppliers. They also can decide when a new channel can be created and thrown
in route. When planning the managers can detect demand uncertainty and pinpoint places that
possibly won’t have the highest demand for the product. They can also change prices to make
CHAPTER 1 6
them more competitive over time. Operational decisions come from the supply chain managers.
They deal with shipment of customers ‘orders and any comments and concerns a customer may
have after the product has been delivered or the service has been provided. They also plan for the
arrival of the parts to the manufacturer and the inventory that is in the store.
