ew Lecture 3 on Supply-Chain Management I posted under the Supplemental Mater ec

Question

ew Lecture 3 on Supply-Chain Management I posted under the Supplemental Mater ects of building and managing supply-chains iew PowerPoint slides 1-34 of Chapter 11 that are posted under Course Documents mit solutions to Chapter 11 Discussion Questions 1-5 (not the problems) at the k (under the Assignments tab) and uploading the file. er cussion questions are: 1. Define supply-chain management. 2. What are the objectives of supply-chain management? 3. What is the objective of logistics management? 4. How do we distinguish between the types of risk in the supply chain? 5. What is vertical integration? Give examples of backward and forward integration. at week

Explanation / Answer

1. Supply chain management is defined as the management of the flow of goods and services ,involves the movement and storage of raw materials, of work in process inventory , and of finished goods from point of origin to point of consumption.

2. Following are the objective of supply chain management------

1. supply chain management is concerned with the efficent integration of supplier, factories, warehouses,and stores so that merchandise is produced and distributed in right quantity, right location nad on right time.

2. minimum total cost of operation nad procurement.

3. solving supplier problem and beyond his level.

4. reduction of pre and post production inventory/

3. Following are the two types of supply chain risk----

External supply chain risk----these are the risk that are outside of your control.

1. demand risk---it is caused by unpredictable or misunderstood customer.

2. supply risk-----it is causes by the interruptions to tthe flow of product,

3. Enviromental risk-----it is usually related to economic, social ,govermental and climate factor.

4. business risk----caused by the factor such as suppliers financial and management stability.

Internal supply chain risk---------these are the risk that are within your control.

1. manufacturing risk------caused by the disruption of internal operations.

2. planning and control risk------caused due to inadequate assesment and planning.

3. mitigation nad contingency risk----- caused by not putting contingencies in place in case of something goes wrong.

4. Vertical integration is defined as a strategy where a firm acquires business operations within the same production vertical. It can be both foreward and backward in nature. vertical integration is when a company control the supply chain from manufacturing to end sale.

example of backward integration is when a bakery businessmoves up the supply chain to purchase a wheat processor and wheat firm. forward integration include iron mining industry that own downstream activities such as steel factories. when a farmer sell his crop to local grocery store rather than to a distribution centerthat control grocery store placement.

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