Read the summary and the most important questions on Supply Chain Management Strategy, Planning, and Operation | 9780133800203 | Sunil Chopra; Peter Meindl

• 3.5 Inventory

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• Why does inventory exist?

  because of a mismatch between supply and demand, most of the time an intentional mismatch -> more economical to manufacture in large lots and then store for future sales

• What is Cycle Inventory?

  average amount of inventory used to satisfy demand between receipts of supplier shipments

• What is Seasonal Inventory?

  Built up inventory to counter predictable seasonal variability in demand. It is build up in periods with low demand and stored for periods with high demand.

• 4 Designing Distribution Networks and Applications to Online Sales

• 4.2 Factors influencing distribution network design

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• Along which two dimensions should the performance of a distribution network be evaluated?

  1. value provided to the customer
  2. Cost of meeting customer needs

• Give 4 supply chain costs that are affected when changing the distribution network design

  1. Inventories
  2. Transportation
  3. Facilities and handling
  4. Information

• What are the Total logistics costs?

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

• 4.3 Design options for a distribution network

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• Which two key decisions should managers make when designing a distribution network?

  • Will product be delivered to the customer location or picked up from prearranged site?
  • Will product flow through an intermediary location?

• 4.5 Distribution Networks in Practise

• Give 4 things to take into account when managing a distribution network

  1. The ownership structure of the distribution network can have as big an impact as the type of distribution network
  2. It is important to have adaptable distribution networks
  3. Products price, commoditization, and criticality affect the type of distribution system preffered by customers
  4. Integrate the Internet with the existing physical network

• 5 Network Design in the Supply Chain

• 5.2 Factors influencing network design decisions

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• What are macroeconomic factors that influence network design decisions in supply chains?

  Things like taxes, tariffs, exchange rates and shipping costs that are not internal to an individual firm.

• What are tariffs and tax incentives?

  Tariffs refers to any duties that must be paid when products or equipment are moved across international, state or city borders.
  Tax incentives are a reduction in tariffs or taxes that countries, states and cities often provide to encourage firms to move to their specific areas.