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Study Pool Directions
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years old.
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3.) Do not use direct quotations.
4.) My school does run these papers through a turn it in report so just keep that in mind. The plagiarism
checker has to be under 10% not including the reference page.
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BUSI 740
CASE STUDY 2 INSTRUCTIONS
Read the Dell Inc.: Improving the Flexibility of the Desktop PC Supply Chain Case Study in the
Simchi-Levi et al. text. Submit a response to each of the end-of-case discussion questions. Each
question must be answered thoroughly, and responses must be supported by the concepts
introduced in the reading/study materials. Each question/answer must be delineated under a
heading in current APA format. Include a title page and reference page also in current APA
format. Incorporate a minimum of 5 peer-reviewed sources with at least 1 source per question.
Submit this assignment by 11:59 p.m. (ET) on Sunday of Module/Week 3.
Textbook Reference:
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2021). Designing and Managing the Supply
Chain: Concepts, Strategies and Case Studies (4th ed.). New York, NY: Richard D. Irwin, Inc.
Running head: CASE STUDY 2
1
BUSI 740: Strategic Supply Chain Management
Dell: Improving the Flexibility of the Desktop PC Supply Chain Case Study
Liberty University
Katrina Deloach
May 25, 2019
DISCUSSION BOARD 2
2
Introduction
Dell Inc.: Improving the Flexibility of the Desktop PC Supply Chain Case Study
As explained by Simchi-Levi, Kaminsky, and Simchi-Levi (2009), Dell was founded in
1984 by Michael Dell in his dorm room at the University of Texas. The company operates a
direct business model that eliminates retailers from the sales channel and sells directly to its
customers. By utilizing this type of model for the delivery of customized system by its
customers at lower than market prices, Dell went on to enjoy business success joining the ranks
as the top-five makers of computer systems worldwide in 1993, and ranking number 1 in 2001.
There are three major manufacturing facilities based in the United States and four international
facilities in Brazil, China, Ireland, and Malaysia. Dell employs more than 62,000 employees
worldwide, with revenues totaling $56 billion in the last four quarters. Since its inception in the
mid-eighties, the key strategy and strength of Dell are that they sell directly to their customers
(Simchi-Levi et al., 2009).
Dell has maintained a direct business model which has allowed the company to save on
manufacturing costs. However, in 2005 Dell realized the rise in their Level 5 manufacturing
costs which was contributed to their inability to produce motherboards promptly to their contract
manufacturers (Simchi-Levi et al., 2009, p. 184). The issues Dell are having involves
forecasting accuracy, third-party supplier issues, and quality issues in their desktop PC supply
chain. In this case study we compare, and contrast manufacturing costs incurred between (L5)
and Level 6 (L6), discuss which of the six proposed manufacturing solutions should Dell
implement, recommendations of sustainability, the effectiveness of Dell’s BPI team, and how to
address the root causes of the increase of L5 manufacturing.
DISCUSSION BOARD 2
3
Manufacturing Costs: L5 versus L6
The questions ask why does cost incur at a higher rate in L5 than that of L6, what are
costs that incur in L5 but not in L6, are there costs that apply only in L6 but not in L5? To better
understand the differences between the manufacturing levels in Dell’s business model, a table is
used as follows:
L 5 Verses L 6 M
L5
L6
Assimilated inside a Dell facility
Chassis shipped 5 weeks on water
Motherboards shipped 1 week by air
Increased motherboard air-freighting
costs
Third party (3rd) integrator (managed
by equipment manufacturers)
Separate logistical costs for chassis and
motherboards
Integrated in China
Integrated motherboard-inside chassis
shipped 5 weeks on water
Labor savings
Motherboards air-freighting costs are
eliminated
Reduced motherboard packaging costs
Note: Data in table taken from Table 2.20 retrieved from Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2009). Designing and managing the
supply chain: Concepts, strategies, and case studies (3rd ed.). New York: McGraw-Hill/Irwin.
Based on the information in this table and according to Simchi-Levi et al. (2009), L5
incurs higher manufacturing and logistics costs than L6 because of Dell’s inability to produce
motherboards in a timely fashion (Simchi-Levi et al., 2009, p. 184). Yamashina and Kubo’s
(2002) explains that “one of the major problems in manufacturing is to reduce cost” (p. 4077).
Simchi-Levi et al. (2009) states the causes for the increase in L5 can be summarized as follows:
1. Chipset supplier decommit or supply issues which creates disruption in Dell’s desktop PC
supply chain and accounts for more than 60 percent of L5 manufacturing.
2. Quality/engineering issues – Motherboards dysfunctions and problems which creates
additional demand for motherboards.
DISCUSSION BOARD 2
4
3. Dell forecasting accuracy – Dell needs to consider sourcing extra chipsets if they expect
to meet customer demands. Long lead times (13 weeks) makes it hard on the chipset
supplier to meet such demands.
4. New product introduction - Actual demand for new PC is volatile, forecast uncertainty
creates a need to air freight extra motherboards (Simchi-Levi et al., 2009, pp. 184-185).
Furthermore, costs incurred in L5 manufacturing are the motherboard packing and freight
costs, chassis and motherboard United States transportation cost, local and regional integration
cost, and motherboard rework cost. On the other hand, L6 only incurs cost for China assembling
the L6 desktop PC chassis which saves Dell on labor (Simchi-Levi et al., 2009).
Six Proposed Manufacturing Solutions
The case study explains as an effort to solve the problem of rising manufacturing cost
incurred during L5, Dell assembled a task force called the business process improvement (BPI)
team which consisted of a variety of employees from different organizations at Dell. The BPI
team collectively identified six manufacturing options for Dell to choose from to manage their
assembly work in the United States (Simchi-Levi et al., 2009, p. 185). The proposed six
manufacturing solutions and their modified costs per box are shown in the table as follows:
Manufacturing Solution Options
Cost per box
Option 1: CM-managed 3PI
$10.07
Option 2: Integration at DAO work cells
$7.00
Option 3A: Integration at SLC/hub
$7.54
Option 3B: Integration at Dell-leased building
$7.70
Option 4: Dell-managed 3PI
$7.61
Option 5: Integrated chassis from CM
factories in Mexico
$7.00
Note: Data in table taken from Table 2.20 retrieved from Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2009). Designing and managing the
supply chain: Concepts, strategies, and case studies (3rd ed.). New York: McGraw-Hill/Irwin.
DISCUSSION BOARD 2
5
The BPI team surveyed the departments that were impacted at Dell for their opinions of
the complexity and costs of the six manufacturing options. Further, the survey categories were
based on the business processes and attributes of the departments that were affected “by the
change of manufacturing method” (Simchi-Levi et al., 2009, p. 186). Of these six solutions,
option 3A should be the one Dell implement. Although it costs more per box than option 1
(original), at $7.54, option 3A received the lowest complexity score because the company
thought having their factory assemble the motherboards into L5 chassis in an SLC would require
them to install new equipment which would lower capital expenditures having no impact on their
existing manufacturing process at the Dell Factory (Simchi-Levi et al., 2009, pp. 186-187).
Karmarkar (1987) study explains that manufacturing companies that consist of a parts
fabrication stage should have some type of materials requirement planning (MRP) system in
place to helps them with deciding on parts demand (p. 409). Dell’s decision is to determine
whether the motherboards (materials) should be implemented (planned) at L5 manufacturing.
However, the cons to option 3A is that it is, among the more complex of the six options from a
cost accounting perspective (Simchi-Levi et al., 2009).
Recommendations of Sustainability
Analyzing the information in Table 6-1 of the case study, and the response in the
previous section regarding the six proposed manufacturing solutions, the author, stands by her
recommended choice in that of option 3A. If the shortage in chipset supply were to continue to
deteriorate, Dell would face challenges in sustaining in either of the six options because of the
chipset integration within the motherboards happening before the L5 and L6 manufacturing
processes (Simchi-Levi et al., 2009). Noblesse, Boute, Lambrecht, and Van Houdt (2014)
research states the lead times determines inventory levels and costs (p. 351). However, option
DISCUSSION BOARD 2
6
3A would be sustainable for Dell to a point because the company can control the 3PI by having
their own factory and because the integrated lead times does not occur until after the fifth week
(Simchi-Levi et al., 2009).
The Effectiveness of Dell’s BPI Team
The methodology employed by Dell’s BPI Team was found to be very effective from a
cost perspective. The team had to select and implement a solution that would give Dell a cost
advantage and operational complexity perspective (Simchi-Levi et al., 2009, p. 187). However,
another approach the BPI team could use is the push-pull strategy. In this type of supply chain
strategy, there are stages that operate a push-based approach while other stages employ a pull-
based strategy (Simchi-Levi et al., 2009, p. 190). Sreedevi and Saranga (2017) study explains
that because of the uncertainty in the supply chain, firms are forced to expand the products they
offer at higher levels of customization in order to remain competitive (p. 332). By employing a
push-pull strategy, Dell would be able to better forecast L5 manufacturing costs.
Addressing the Root Causes of the Increase of L5 Manufacturing
Dell can effectively address the root causes contributing to the increase of L5
manufacturing first, by providing the motherboards to the CMs in a timely manner. Second,
ensuring that the chipset supplier does not decommitt (multiple supplier issues) or have other
supply concerns. Third, Dell needs to accurately forecast to avoid fluctuations in their demand.
Lastly, for new production introduction, Dell would need to plan their demand better. These are
some of the main issues as to why the company has seen an increase in L5 manufacturing costs.
They must be addressed so that there can be a reduction in both manufacturing costs and lead
times (Simchi-Levi et al., 2009). Lead times are ultimately very important throughout a firm’s
supply chain. Harbour (2016) states, manufacturing costs are on the rise and product demand is
DISCUSSION BOARD 2
7
plateauing across a number of industries” (p. 1). Therefore, Dell must get to the root causes of
why L5 manufacturing costs has increased.
Conclusion and Recommendations
In closing, Dell has seen an increase in L5 manufacturing costs simply because of their
inability to produce motherboards on time. To minimize this problem, one solution
recommended to Dell is to elect option 3A of the six solutions because it gives them the best
method to reduce cost and manufacturing time, and afford them sustainability in the computer
industry. The BPI team was beneficial to Dell in that they were successfully able to implement a
cost-saving approach to the issues regarding the motherboards and manufacturing costs.
Further concluding, obviously reducing costs is one of the major concerns in
manufacturing according to Yamashina and Kubo (2002). A recommendation that Dell could
consider helping with their increase of L5 manufacturing costs is employing the manufacturing
cost deployment method. “This method, termed `manufacturing cost deployment’, is a very
powerful tool to identify production losses to reduce costs” (Yamashina & Kubo, 2002, p. 4077).
DISCUSSION BOARD 2
8
References
Harbour, L. (2016). Trends impacting the supply chain: The cost of manufacturing and product
demand are set to cause financial and business climate changes across the moldmaking
industry. MoldMaking Technology, 19(1), 14.
Karmarkar, U. S. (1987). Lot sizes, lead times and in-process inventories. Management Science,
33(3), 409-418. doi:10.1287/mnsc.33.3.409
Noblesse, A. M., Boute, R. N., Lambrecht, M. R., & Van Houdt, B. (2014). Lot sizing and lead
time decisions in production/inventory systems. International Journal of Production
Economics, 155, 351-360. doi:10.1016/j.ijpe.2014.04.027
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2009). Designing and managing the supply
chain: Concepts, strategies, and case studies (3rd ed.). New York: McGraw-Hill/Irwin.
Sreedevi, R., & Saranga, H. (2017). Uncertainty and supply chain risk: The moderating role of
supply chain flexibility in risk mitigation. International Journal of Production
Economics, 193, 332-342. doi:10.1016/j.ijpe.2017.07.024
Yamashina, H., & Kubo, T. (2002). Manufacturing cost deployment. International Journal of
Production Research, 40(16), 4077-4091. doi:10.1080/00207540210157178
Running head: CASE STUDY 2 1
Case Study 2: Dell
BUSI 740-
Liberty University
Abstract
CASE STUDY 2
2
In Case Study 2, we will discuss the impacts the Dell computer company had on the
worldwide personal computer industry (Simchi-Levi, Kaminsky, & Simchi-Levi, 2008, p. 180).
The Dell computer company began its endeavors from a college students Texas dormitory room
in 1984, and as the company became more popular, Mr. Michael Dell showed the industry just
how easy it was to have availability and affordability to computer consumers (Simchi-Levi, et.
al., 2008, pp. 180-181). Starting in 1984, Mr. Dell, set a goal to base his company’s business
model off the theory that he could go directly with customers, alleviating middle-man sales. With
this business model, a company could offer its consumers personalized consumer at below
market rates by cutting out the middleman (Simchi-Levi, et. al., 2008, p. 180). Through the years
leading up to 1993, Dell and the corporation succeeded with their strategy and stayed strong in
sales leading to their selection of number one along with the top five computer companies in
2001 (Simchi-Levi, et. al., 2008, p. 180). Additionally, Dell maintained three major
manufacturing facilities which created jobs in the United States and leading up to 2001, Dell had
employed over 65,000 workers (Simchi-Levi, et. al., 2008, p. 180).
Dell
CASE STUDY 2
3
Throughout Dell’s years, the company also expanded into the electronic industry by
introducing items like televisions, server components, LCD monitors, and many more
peripherals (Simchi-Levi, et. al., 2008, pp. 180-181). Dell took great pride in alleviating store
sells and working personally with its consumers. The company had developed their abilities over
the years to support customers, sell directly and this assisted in Dell’s to keep their
manufacturing costs low and stay extremely competitive in delivery times from order to receipt.
As Dell consistently grew, the company continued to focus strongly on their ability to decrease
the amount of time it took from ordering to delivery and find additional ways of lowering
product costs for their consumers. However, during a 2005 manufacturing audit, management
began to review the root causes of level five (L5) manufacturing increased costs that appeared to
have a potential impact on the company’s overall manufacturing costs. With this said, Dell was
unable to take full advantage of lower operational and manufacturing costs due to the fact they
were expending too many funds towards their L5 operations, roughly 27 percent more cost from
March to June 2005 (Simchi-Levi, et. al., 2008, pp. 183-184).
Upon this investigated issue, Dell further reviewed all L5 manufacturing operations in
order to resolve concerns and implement improved tactics which would resolve quality,
engineering, forecasting and other issues (Simchi-Levi, et. al., 2008, p. 185). Throughout the
Dell Case Study, L5 will be reviewed to determine methods and additional analyzation to keep
costs lowered from customer intake, to manufacturing, to delivery. We will provide discussion
on what best results would have the most impact, helping Dell to grow continually in their
manufacturing practices.
CASE STUDY 2
4
Why does L5 incur higher manufacturing and logistics costs than level six (L6)? What are
some of the costs that are incurred by L5 but not in L6? Are there any costs that apply to
only L6 but not L5?
Upon review of the manufacturing issues within L5, L5, which included the assembly of
desktops, floppy drives and fans, had significantly increased financial impacts than that of L6
due to many involved issues. First, L5 manufacturing was located directly in the United States
facility, whereas, L6 manufacturing was located within China. With this said, L6 manufacturing
had lower labor costs associated than that of L5 for many reasons. For example, in L6
manufacturing, L6 processes all shipments of chassis from China back to the Dell U.S. facility
that includes the motherboard; this is not something which is performed within L5 processes
(Simchi-Levi, et. al., 2008, pp. 182-183). Another key issue is how L5 manufacturing completion
involves chassis shipments by boat (taking five weeks) and motherboards at different times
through plane (taking about one week) (Simchi-Levi, et. al., 2008, p. 184).
Upon literature review of supply chain shipping costs, having items completed in two
different manners, in multiple countries, can cause company to have higher associated overhead
cost association. According to Qi & Lee (2015), shipping from different types of suppliers and
different shipping strategies can cause higher costs associated with overall manufacturing
delivery. In the Dell example, L5 and L6 shipping methods involve air or water transportation
options and this can impede the successful expedited practices needed to ensure scheduled
delivery timelines (Qi & Lee, 2015). Related to this example, we can compare the costs
associated locally in the continental U.S. with the UPS shipping corporation. In the related UPS
example, it could be more expensive to use expedited services, two-member delivery man
services and in this case, overseas shipment costs (Qi & Lee, 2015). In this case, the L5
CASE STUDY 2
5
processes cause the company to have more options in its manufacturing and delivery; however,
there is significant risk associated with having a third-party ship freight from the air or by water.
Having separate manufacturing locations assemble the chassis and motherboards for the systems
cause delays and does not provide the flexibility needed to negate higher costs due to potentially
higher associated air freight shipping charges (Qi & Lee, 2015). The L6 process does cause
supply chain flexibility, but the shipping costs could be lowered through reworking the overall
process. Again, although the L6 process assists Dell in lowering the labor costs, the air freight
higher costs must be reviewed in order to eliminate additional expenditures and Dell must look at
options to have one location put together both the mother board and the chassis. Doing this, Dell
could add more flexibility to their shipping speed and lower cost to refocus manufacturing
initiatives on the overall customer experience.
Which of the six proposed manufacturing solutions should Dell implement, based on the
survey result (Table 6-1)? Why? What are the pros and cons of this recommendation?
The cross-functional business process improvement (BPI) team’s jointly implemented
options, show how Dell can improve and lower the cost involved in manufacturing. According to
the case study the options include keeping current, Dell America Operations (DAO) enabling
work to become cellular in their integrative processes for smooth and more sustainable U.S.
operations, offline integration at the SLC by keeping L6 through 10 unchanged, 3PI operations
directly processed by the Dell company and for Dell to negotiate CM support (Vachon, Halley &
Beaulieu, 2009). Overall, Dell’s BPI team wants to ensure issues are resolved in order to have
the most optimal solution and for Dell to implement. After reviewing the BPI’s options, the
review believes that Dell must look at both options 3A and 4.
CASE STUDY 2
6
Having the lower complexity score, option 3A states that the company has its own
associates and factory to assemble; all the company has to do is install newer equipment at the
SLC. By doing this initially, Dell can have no impact on manufacturing processes in the factory
consumers (Simchi-Levi, et. al., 2008, pp. 186.). Additionally, with only one (1) point of a
difference, Dell should also consider option 4. With option 4, box costs are only $7.61, and this
is not high compared to option 3A which is only $7.54. If dell were to choose option 4, the
company would have full operational control for 3PI processes. This would keep logistical costs
down to a minimum and potentially help with eliminating any inventory issues. With choosing
one of these two options, Dell’s lead times will significantly improve.
If Dell chooses option 4, not having an external party control processes, Dell can be more
involved and control the firms needed processes more, ultimately leading to cost savings in
production. If Dell has more control over the operational and real world data needed to deliver
their products, experts in customer service, engineering, production and logistics can properly
evaluate current and revolving inventory needs that are under way in real time (Delisle, St-Pierre
& Copeck, 2006). Having access to such systematic data can assist better in planning and making
decisions through support systems (Delisle, St-Pierre & Copeck, 2006).
How easily sustainable is your recommendation for the previous question if the chipset
supply shortage further deteriorates?
After reviewing the previous set of answers to the previous question, and as options 3A
and 4 are the most appropriate, if there was a concern with a onset of chipset shortage Option 4
would not be Dell’s best choice. The main concern lies within the initial issue of having L5 and
L6 manufacturing processes separated. If option 4 was chosen, there could be additional delays
in the production processes in computer development. Option 3A continues to be the best mode
CASE STUDY 2
7
and presents better control in order to improve upon the activities and their capabilities. Through
this selection, Dell can easily manage shortfalls and control suppliers by devoting resources and
efforts internally in order to improve upon their performance (Jin, Hu, Kim & Zhou, S., 2018).
How good is the methodology employed by the BPI team to determine the optimal
manufacturing option for Dell? Are there more effective approaches?
The BPI team used thorough and complex evaluation skills to encompass an all-
embracing corporate review. The team considers the costs associated within all affected
departments and integrates decisions to attempt to become more profitable. The teams review
was compelling and outlined the manufacturing complexity for each affected stakeholder inside
of Dell. For example, external relationships were evaluated, and with this all said, Dell was
shown how they can gain more profitability through making better decisions to keep their
wholesale prices minimized for customers, as well as maximizing the internal stakeholder
benefits of effective manufacturing (Jin, Hu, Kim & Zhou, S., 2018).
How can Dell effectively address the root causes contributing to the increase of L5
manufacturing?
Dell must consider the many concerns that need to be addressed. Dell must implement an
approach that addresses the high costs associated with the L5 overall development. Dell must
progress the techniques used to complete motherboard operations to CM’s and deliver the
product faster. By refocusing on their procedures, lead times can become reduced and product
movement may be accelerated. If Dell changes the conventional and long-established
approaches, the overall encounter can alter negative lead-time. Dell must strategically re-align in
order to improve their product development and reduce the costs associated with the discussed
waste (Vachon, Halley & Beaulieu, 2009).
CASE STUDY 2
8
References
Delisle, S., St-Pierre, J. & Copeck, T. (2006). A hybrid diagnostic-advisory system for small
and medium-sized enterprises: A successful AI application. doi: 10.1007/s10489-006-
6934-z
Jin, Y., Hu, Q., Kim, S.W., & Zhou, S. (2018). Supplier development and integration in
competitive supply chains. Productions and operations management. doi:
10.1111/poms.12984
Qi, L., & Lee, K. (2015). Supply chain risk mitigations with expedited shipping. Omega, 57(A),
98-113. doi:10.1016/j.omega.2014.07.010
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and managing the supply
chain: Concepts, strategies and case studies (3rd ed.). New York, NY: Richard D. Irwin,
Inc. ISBN: 9780073341521.
Vachon, S., Halley, A. & Beaulieu, M. (2009). Aligning competitive priorities in the supply
chain: the role of interactions with suppliers. International Journal of Operations. doi:
10.1108/01443570910945899.
CASE STUDY 2
9
Yes,
This is the feedback from the last paper you did for me. I got an 84% on the last paper
you did for me Please follow this feedback:
I review assignments first for any grammatical or punctuation issues.When writing on this
level, there should be very limited errors.Please use spell check or another source to
proofread your work. We all make mistakes and I do not count off a great deal for errors,
so review your work before submitting it.
I appreciate your analysis of this case.Your research added much value to the case and
provided further evidence of reliability and validity in your paper’s content.
This case presented several challenges, such as forecasting, production quotas/costs,
and lead-time just to name a few.It is important to understand which company can
produce the quantity at a lower cost and therefore, being able to balance the supply
chain.
Please review my comments and analysis in the grading rubric and also how your grade
was determined.
Good work.
Blessings,
It’s costly to produce products that do not sell and companies, such as
Sport Obermeyer incur the direct cost of manufacturing units that yield little or no revenue
when products sit on shelves. Moreover, if production is capacity constrained, then
companies waste a unit of production capacity that could be employed for a unit that
might have sold. So, it may be costly not to produce products that may sell. In this case,
companies forgo the unit’s margin when products are not created. An approach that
focuses on the production of less risky units during the first production period is
recommended due to the lack of information available to Wally on market demand (Lee
& Whang, 1999).
Operational changes should be made to improve performance, such as the life cycle
of Obermeyer’s inventory. Also, product production takes a significant amount of time,
which includes a longer lead time of raw materials. It also appears demand is unknown
nor is feedback obtained from respective retailers. Lead time can have an impact on
demand, profit, and especially pricing strategy. Six Sigma and Toyota production
systems should be considered.
The changing market needs to be reviewed in International markets. Does
Sport Obermeyer need to create a two-tier market with corresponding price points? If
they choose to pursue that option, which already seems to be organically in the works,
then differentiation of brands should be considered unless Obermeyer loses its profitable
higher end to a perception of low quality. Many companies have multiple lines targeted to
different price points but those paying a premium generally like to feel they are getting
something for the extra cost.
1
Supply Chain Management Case Study 1
Supply Chain Management Case Study 1
Alex Jarbo
Liberty University
2
SUPPLY CHAIN MANAGEMENT
Supply Chain Management Case Study
Question One
Forecast for 10 Styles
Style Pricing Average
Forecast
SD 2 x SD
Gail 110 1017 194 388
Isis 99 1042 323 646
Entice 80 1358 248 496
Assault 90 2525 340 680
Teri 123 1100 381 762
Electra 173 2150 404 807
Stephanie 133 1113 524 1048
Seduced 73 4017 556 1113
Anita 93 3296 1047 2094
Daphne 148 2383 697 1394
totals 20000
SF = max
3
SUPPLY CHAIN MANAGEMENT
(μ-2m, m- μ,0)
Σ
Order Quantity =Max (600, μ-600- [min. sf x σ])
China Analysis
Style Price μ SD 2xSD u-
2m/SD
m-u/
sd
SF u-
1200
Total
Seduced 73 4017 556 1113 1.45 -2.53 1.45 2817 2728 2728
Gail 110 1017 194 388 -3.56 .47 .47 -183 -214 1200
Anita 93 3296 1047 2094 .43 -1.00 .43 2096 1928 1928
Isis 99 1042 323 646 -2.1 .24 .24 -158 -210 1200
Assault 90 2525 340 680 .18 -1.95 .18 1325 1271 1271
Teri 123 1100 381 762 -1.71 .13 .13 -100 -161 1200
Stephanie 133 1113 524 1048 -1.23 .08 .08 -87 -171 1200
Electra 173 2150 404 807 -.31 -1.18 0 950 885 1200
Daphne 148 2383 697 1394 -.01 -.85 0 1183 1071 1200
Entice 80 1358 248 496 -2.10 -.32 0 158 118 1200
Totals 14327
Hong Kong Analysis
Style Price μ SD 2xSD u-
2m/SD
m-u/
sd
SF u-600 Total
4
SUPPLY CHAIN MANAGEMENT
Seduced 73 4017 556 1113 2.53 -3.07 2.53 3417 3060.8 3060
Assault 90 2525 340 680 1.95 -2.83 1.95 1925 1707.2 1707
Electra 173 2150 404 807 1.18 -1.92 1.18 1550 1291.6 1291
Anita 93 3296 1047 2094 1.00 -1.29 1.00 2696 2025.9 2025
Daphne 148 2383 697 1394 .85 -1.28 .85 1783 1336.9 1337
Entice 80 1358 248 496 .32 -1.53 .32 758 599.39 600
Gail 110 1017 194 388 -.47 -1.07 0 417 292.78 600
Isis 99 1042 323 646 -.24 -.68 0 442 235.19 600
Teri 123 1100 381 762 -.13 -.66 0 500 256.29 600
Stephanie 133 1113 524 1048 -.08 -.49 0 513 177.72 600
Totals 12420
Combined Analysis
Style Laur
a
Car
olyn
Gre
g
Wen
dy
To
m
W
all
y
AF SD 2xS
D
Prod
uce=
avg-
2sd
Gail 900 1000 900 1300 800 12
00
101
7
194 388 629 629 1200
Isis 800 700 1000 1600 950 12
00
104
2
323 646 395 600 1200
Entice 1200 1600 1500 1550 950 13 135 248 496 863 863 1200
5
SUPPLY CHAIN MANAGEMENT
50 8
Assaul
t
2500 1900 2700 2450 280
0
28
00
252
5
340 680 1845 1845 1845
Teri 800 900 1000 1100 950 18
50
110
0
381 762 338 600 1200
Electr
a
2500 1900 1900 2800 180
0
20
00
215
0
404 807 1343 1343 1343
Stepha
nie
600 900 1000 1100 950 21
25
111
3
524 1048 65 600 1200
Seduc
ed
4600 4300 3900 4000 430
0
30
00
401
7
556 1113 2904 2904 2904
Anita 4400 3300 3500 1500 420
0
28
75
329
6
104
7
2094 1202 1202 1202
Daphn
e
1700 3500 2600 2600 230
0
16
00
238
3
697 1394 990 990 1200
totals 20000 2000
0
2000
0
2000
0
200
00
20
00
0
200
00
10572 11573 14493
Production Differences
Style Pric
e
Produc
e
HK China Hong
Kong
Exces
China
Exces
s
HK
Extra
China
Extra
HK
Op
time
Chin
a
Op
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SUPPLY CHAIN MANAGEMENT
=avg-
2sd
s
Order
Order Cost Cost in
WKs
Tm
in
WKs
Gail 110 629 629 1200 0 571 0 62810 2.76 2.5
Isis 99 395 600 1200 205 805 20295 79695 2.63 2.5
Entice 80 863 863 1200 0 337 0 26960 3.78 2.5
Assault 90 1845 1845 1845 0 0 0 0 8.09 3.84
Teri 123 338 600 1200 262 862 32226 106026 2.63 2.5
Electra 173 1343 1343 1343 0 0 0 00 5.89 2.8
Stephani
e
133 65 600 1200 535 1135 71155 150955 2.63 2.5
Seduced 73 2904 2904 2904 0 0 0 0 12.7
4
6.05
Anita 93 1202 1202 1202 0 0 0 0 5.27 2.5
Daphne 148 990 990 1200 0 210 0 31080 4.34 2.5
10527 1157
3
1449
3
1002 3920 123,67
6
457,52
6
50.7
6
30.19
Question Two
Style Average Forecast Standard Deviation Coefficient of
Variation
Gail 1,017 194 0.191
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SUPPLY CHAIN MANAGEMENT
Isis 1,042 323 0.310
Entice 1,358 248 0.183
Assault 2,525 340 0.135
Teri 1,100 381 0.346
Electra 2,150 404 0.188
Stephanie 1,113 524 0.471
Seduced 4,017 559 0.138
Anita 3,296 1,047 0.318
Daphne 2,383 697 0.292
Question 4
The statistics show that the company takes a long time from the purchase of raw materials
to the actual selling of the items. It translates to inconsistent demands for the company that affects
the performance to a large extent (Barrow & Kourentzes, 2016). Wally may experience reduced
demands in the future that may lead to loss of the business as it becomes unsustainable. He may
consider reducing the number of products or styles sold in the business. It ensures that the
company can focus on few products and manage the inventory appropriately (Wild, 2017). Skills
may also fall short that makes specific product lines substandard to the market targeted.
Transaction costs remain high and Wally may need to implement strategies that help reduce the
costs (Bozarth & Handfield, 2016). It may entail increasing the limit on the number of products per
8
SUPPLY CHAIN MANAGEMENT
single transaction to increase the economies of scale and reduce the costs associated with a single
transaction. Inventory management may also help to streamline the inefficiency of the company
operations. Large amounts of stock increase the stock holding costs. It may also entail improving
on the lead time to ensure that inventory movement is efficient. Stock outs may also cause an
increase in losses associated with stock outs that may result to loss of revenue and diminish
customer loyalty in to the business.
Question 5
Outsourcing entails having the production occurring from either China or Hong Kong.
Outsourcing may have certain advantages that the company can use to streamline the current
operational performance. However, it may also require certain adjustments to the normal operation
of the business that may prove challenging to realize (Costa, 2016). Outsourcing may occur from
Hong Kong or China which the company needs to evaluate to use the optimal method. Outsourcing
from Hong Kong has the advantage of higher product quality and faster production due to smaller
production quantities. However, the high cost of labour may drive cost of production higher. China
has the advantage of having lower wage rates that may reduce production costs (Hugos, 2018).
However, it has a longer working hours and the quality of products are lower than those produced
in Hong Kong. The minimum requirement per order is higher in Hong Kong which may present a
challenge in inventory management. Therefore, based on the position of the company and the
challenges it faces, the best strategy for the short-term entails outsourcing from Hong Kong. It
helps to solve the problem of inventory management and reduce the lead time by a large extent.
References
comma
comma here
9
SUPPLY CHAIN MANAGEMENT
Barrow, D. K., & Kourentzes, N. (2016). Distributions of forecasting errors of forecast
combinations: implications for inventory management. International Journal of Production
Economics, 177, 24-33.
Bozarth, C. C., & Handfield, R. B. (2016). Introduction to operations and supply chain
management. Pearson.
Costa, K. (2016). God at Work: Live Each Day with Purpose. Thomas Nelson.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Wild, T. (2017). Best practice in inventory management. Routledge.
Book titles are italicized. Journal titles and volume
numbers itaicized.
Running head: DELL
Dell Case Study
Name
Institution:
2
DELL
Dell Case Study
Cost Comparison between Dell L5 and L6
Endless reporting of the assembling issues inside Del L5 model, which incorporated the
gathering of work areas, floppy drives and fans, had fundamentally expanded monetary effects
than that of L6 because of many included issues (Ghasemi, 2017). To begin with, L5 fabricating
was found in the United States office, while, L6 production was situated inside China. L6
fabricating recorded work costs that ran lower than the L5 model for some reasons. L6 measures
undercarriage shipments from China manufacturer back to the Dell offices in U.S. office that
puts the other part entailing the motherboard; something not performed inside L5 measures.
Another major question is the manner by which L5 fabrication finishing includes case shipments
by boat (requiring five weeks) and motherboards at various occasions through plane (requiring
around multi week).
Upon writing survey of store network dispatching costs, having things finished in two distinct
habits, in different nations, can make organization have higher related overhead expense.
Transporting from various kinds of providers and diverse transportation methodologies can cause
greater expenses related with producing. In the Dell model, L5 and L6 dispatching techniques
include air or water transportation alternatives and this can obstruct the effective facilitated
rehearses expected to guarantee planned conveyance courses of events (Ghasemi, 2017).
Identified with this model, analysis of the expenses related locally in the mainland U.S. with the
UPS transporting organization. In the connected UPS model, it very well may be more costly to
utilize sped up administrations, two-part conveyance man administrations and for this situation,
3
DELL
abroad shipment costs. For this situation, the L5 measures expands the organization alternatives
in assembling and conveyance; nonetheless, there exist a danger related to utilizing another
transport cargo that entails shifting from using air transport to water transport. Using separate
assembling areas complicate the case and required motherboards used for the frameworks cause
delays and do not give the adaptability expected to invalidate greater expenses because of
possibly higher related airship cargo transporting charges. The L6 cycle causes production
network adaptability, yet the transportation expenses could be brought down through adjusting
the general interaction. Once more, the L6 cycle helps Dell in bringing down the work costs, the
airship cargo greater expenses should be surveyed to take out extra consumptions and Dell
should see alternatives to have one area set up both the mother board and the skeleton. Doing
this, Dell could add greater adaptability to their delivery speed and lower cost to pull together
assembling activities on the general client experience.
Solution to Implement
Collaborative group options that improve the rate (BPI), show how Dell can improve and reduce
the costs associated with mergers. As indicated by the context study of decisions involving
current retention, Dell America Operations (DAO) to enable cell acquisition function in their
integration cycles of smooth and supportive US operations, offline connections to SLC by
keeping L6 jobs unchanged, 3PI operations owned by Dell's organization and for Dell to arrange
CM uphold (Selviaridis & Spring, 2018). Dell's BPI team needs to make sure the issues are
resolved in order to have the best planning and for Dell to be able to do that. After looking at
other BPI alternatives, the study accepted that Dell should move around in these two decisions
3A and 4.
4
DELL
With unexpectedly low points, another 3A says the organization has its partners and production
lines to be collected; required by the organization to introduce up-to-date hardware at SLC. By
doing this initially, Dell is unable to influence production methods for consumers of production
plants. Moreover, for one (1) purpose of separation, Dell should likewise consider 4 alternatives.
For the other 4, the cost of the box is just $ 7.61, and this is not much opposed to choosing 3A
which is just $ 7.54. If Dell somehow managed to choose another 4, the organization would have
full control of the performance of 3PI cycles. This will reduce the calculated costs and possibly
help get rid of any stock problems. With one of these two options, Dell's lead times will improve.
When Dell chooses the other 4, which does not take steps to control external recruitment, Dell
can be heavily deployed and control organizations that need more cycles, ultimately resulting in
cost savings to continue. In the event that Dell has a lot of command over the functional and
validated information expected to pass on their assets, experts in customer care, design, creation,
and integration can appropriately assess current and ever-changing stock needs (Selviaridis &
Spring, 2018). Getting closer to that methodical knowledge can better help you plan and resolve
options with emotional support networks.
Change in Solution with Deterioration of Chipset Supply
By looking at the previous set of answers to the previous question, and as an option, 3A and 4
are the most appropriate, if there were concerns about the onset of chipset shortages, Option 4
would not be Dell's best decision. The main concern lies in the basic issue of having L5 and L6
production methods separated. Should another 4 be taken, there could be further delays in the PC
development process (White House, 2018). The other 3A continues to be the best mode and
introduces better controls to refine their tests and strengths. With this option, Dell can
5
DELL
undoubtedly look at the shortcomings and supply chain management providers and try internally
to refine their show.
Favorability of the BPI team Methodologies
The BPI group utilized intensive and complex assessment abilities to include a comprehensive
corporate audit. The group considers the expenses related inside completely influenced divisions
and coordinates choices to endeavor to turn out to be more productive (Simchi-Levi et. al.,
2008). The groups audit was convincing and delineated the assembling multifaceted nature for
each influenced partner within Dell. For instance, outside connections were assessed, and with
this said, Dell demonstrated how they can acquire productivity through settling on better choices
to keep their discount costs limited for clients, just as augmenting the inner partner advantages of
powerful assembling.
How to handle Increasing L5 Manufacturing
Dell should consider the numerous worries that should be tended to effectively. Dell should
actualize a methodology that tends to the significant expenses related with the L5 in general turn
of events (Simchi-Levi et. al., 2008). Dell should advance the strategies used to finish
motherboard activities to CM's and convey the item quicker. By pulling together on their
systems, lead times can get diminished and item development might be quickened. On the off
chance that Dell changes the ordinary and since quite a while ago settled methodologies, the
general experience can adjust negative lead-time. Dell should deliberately re-adjust to improve
their item advancement and lessen the expenses related with the talked about waste.
6
DELL
References
Ghasemi, P., Khalili-Damghani, K., Hafezolkotob, A., & Raissi, S. (2017). A decentralized
supply chain planning model: a case study of hardboard industry. The International
Journal of Advanced Manufacturing Technology, 93(9), 3813-3836.
Liu, C. L., Shang, K. C., Lirn, T. C., Lai, K. H., & Lun, Y. V. (2018). Supply chain resilience,
firm performance, and management policies in the liner shipping industry.
Transportation Research Part A: Policy and Practice, 110, 202-219.
Selviaridis, K., & Spring, M. (2018). Supply chain alignment as process: contracting, learning
and pay-for-performance. International Journal of Operations & Production
Management.
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2021). Designing and Managing the Supply
Chain: Concepts, Strategies and Case Studies (4th ed.). New York, NY: Richard D. Irwin,
Inc.
Uwizeyemungu, S., Raymond, L., Poba-Nzaou, P., & St-Pierre, J. (2018). The complementarity
of IT and HRM capabilities for competitive performance: a configurational analysis of
manufacturing and industrial service SMEs. Enterprise Information Systems, 12(10),
1336-1358.
