College of Business Administration
BUSI 3322 – Supply chain Management
HW # 1
Manal AlSaif
200800621

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. (Page - 20)
Mainly there are five basic stages and they are:
1. Suppliers.
2. Manufacturers.
3. Wholesalers.
4. Retailers.
5. Final Customers
Moreover, there are three main flows involved in the supply chain, which are:
Financial, Material and Information.

Why should a firm like Dell take into account total supply chain profitability
when making decisions? (Page - 20)
Supply chain profitability measures a company’s success; in addition supply chain
management is an implementation of cross-functional relationships such as
customers, retailers and suppliers. If Dell neglects supply chain the consequences
would be huge loses (customers, market share). By maintaining supply chain
management, Dell is contributing to its success.
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
How would you characterize the competitive strategy of a high-end department
store chain such as Nordstrom? What are the key customer needs that
Nordstrom aims to fill? (Page - 43)
Nordstrom’s competitive strategy is providing large quantities of inventory of various
items to satisfy their customers’ needs in a timely manner. They also provide great
customer service for all customers whether they’re shopping, refunding or simply
browsing. In addition, they offer online and by phone service to reach all possible
customers. Nordstrom’s customer’s needs are:

Large quantity and variety of merchandise.

Multiple channels in which the product can be purchased.

Great customer service.

Innovation and constantly updated products.
Nordstrom can aim to fill those needs by keeping their inventory continually full and
multifarious, provide excellent customer service, constantly provide innovative
products and allow customers to shop via various channels.

Give arguments to support the statement that Wal-Mart has achieved very good
strategic fit between its competitive and supply chain strategies. (Page - 43)
At Walmart the competitive strategies are: Share of Information, they replenish
repeatedly, the offering of various products at very low prices and their service
differentiation. Moreover, their supply chain strategies include customer satisfaction, the
accessibility to numerous products at low prices, coordination between supply chain
stages, good marketing and sales offerings that generate value for the company and finally
their low inventory levels and positioning. Due to all the mentioned reasons we notice a
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pattern of overlapping strategies, thus proving that Walmart has in fact achieved a balance
point.

How could an auto manufacturer use transportation to increase the efficiency of
its supply chain? (Page - 65)
Manufacturers can certainly reduce the costs of inventory and warehousing by following a
good supply chain management, which will also help deliver the product to the final
customer during a shorter period of time. The manufacturer can also reduce costs by
choosing a cheaper transport alternative such as rails or ships, though this depends on the
nature of the product and whether or not it will be defective during the delivery. However
by choosing cheaper alternative the manufacturer is reducing cost but limiting the supply
chain responsiveness.

Motorola has gone from manufacturing all its cell phones in-house to almost
completely outsourcing the manufacturing. What are the pros and cons of the
two approaches? (Page - 65)
Motorola made the decision based on the supply chain surplus, because when an outside
third party created a greater surplus it became the best solution for the company.
However by outsourcing Motorola gave up some of its control, design talent and assembly
expertise in order to reach a satisfying level of quality from the supplier. In addition,
products that are being outsourced are rarely being brought back in-house and should not
be linked to the outsourcing party core competency too closely.
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
What types of distribution networks are typically best suited for commodity
items? (Page - 112)
The problem with commodity items is that they are available from multiple sources,
therefore customers expect to access them quickly, if not they will get them from
somewhere else. For high demand, low variety products the best distribution network to
be achieved is the one designed for retail storage with customer pickup to achieve rapid
response. Moreover, for high demand and quick response products, an effective
distribution network is to use distributor storage with last-mile delivery.

What type of networks is best suited to highly differentiated products? (Page 112)
There are two approaches that best suit highly differentiated products, one is manufacturer
storage with direct shipping. The other is manufacturer storage with in-transit merge.
Both support a wider variety of products by their ability to aggregate inventory and puts
back product customization.

Amazon.com has built new warehouses as it has grown. How does this change
affect various cost and response times in the Amazon.com supply chain? (Page 143)
With the new warehouses that Amazon added, their logistics, inventory and facility costs
have changed as well. More warehouses mean higher fixed costs but also lower
transportation costs. Responsiveness has been increased at a similar cost, or it may
remain the same at a reduced cost. With the increased number of warehouses, inventory
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costs changed as well, meaning Amazon can hold more inventory and gain advantage of
pooling to cut down on some items quantities.

Consider a firm such as Ford, with more than 150 facilities worldwide. List the
pros and cons of having many facilities and why it may or may not be suitable for
the automobile industry. (Page - 143)
Various strategies to create server facilities are implemented by automakers. The benefits
of server facilities is to supply the market in a specific location, while taking advantage of
tax incentives, local content requirements, tariff obstacles, and high logistic costs. This
strategy best works when high demand exist for the product, however if demand drops,
the company will be stuck with pricey excess capacity. Moreover, if those facilities are
flexible, they can be used to produce exports of popular models. If the facilities are not
flexible or the sales are flat, then the manufacturer will have to endure the costs or cast off
assets.
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