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Discussion Questions On Designing And Managing The Supply Chain

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Designing and Managing the Supply Chain David Simchi-Levi Philip Kaminsky Edith Simchi-Levi Solutions for Discussion Questions1 Kerem B¨ulb¨ul 1We would like to thank Shiming Deng for his valuable contributions to the preparation of this manual. Chapter 1 Introduction to Supply Chain Management Discussion Questions Question 1 Pick any car model manufactured by a domestic auto maker. For example, consider the 2002 Ford Thunderbird. a. The supply chain for a car typically includes the following components: 1. Suppliers for raw materials 2. Suppliers for parts and subsystems 3. Automobile manufacturer (Ford, in this example). Within a company, there are also different departments, which constitute the internal supply chain: …show more content…

4. In a service supply chain, the (explicit) cost of information is higher than in a product supply chain. Note that in the mortgage example above, the bank has to compensate the credit reporting agency for each credit report it obtains. Question 3 Many supply chains evolve over time. For example, consider a memory chip supply chain. Production strategies may change during different stages of the product life cycle. When a new memory chip is introduced, price is high, yield is low, and production capacity is tight, and the availability of the product is important. Consequently, production is usually done at plants close to markets, and the management focuses on increasing yield, reducing the number of production disruptions, and fully utilizing capacity. When the product matures, however, its price drops and demand is stabilized for a period of time, so minimizing production cost moves to center stage. To reduce costs, production may be outsourced to overseas foundries, where labor and materials are much cheaper. Question 4 A vertically integrated company aims at tighter interaction among various business com- ponents, and frequently manages them centrally. Such a structure helps to achieve sys- temwide goals more easily by removing conßicts among different parts of the supply chain through central decision making. In a horizontally integrated company, there is frequently no beneÞt in

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