Logistic Free Essays

1. Consider the supply chain for a domestic automobile. a. We will write a custom essay sample on Logistic or any similar topic only for you Order Now What are the components of the supply chain for the automobile? b. What are the different firms involved in the supply chain? c. What are the objectives of these firms? d. Provide examples of conflicting objectives in this supply chain. e. What are the risks that rare or unexpected events pose to this supply chain? a. b. c. d. e. 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 the example). Within a company, there are also different departments, which constitute the internal supply chain: i. Purchasing and material handling ii. Manufacturing iii. Marketing, etc. 4. Transportation providers 5. Automobile dealers b. Many firms are involved in the supply chain. 1. Raw material suppliers. For instance, suppliers for steel, rubber, plastics, etc. 2. Parts suppliers. For instance, suppliers for engines, steering wheels, seats, and electronic components, etc. 3. Automobile manufacturer. For instance, Ford. 4. Transportation providers. For instance, shippers, trucking companies, railroads, etc. 5. Automobile dealers. For instance, Hayward Ford. c. All companies involved in the supply chain want to maximize their respective profits by increasing revenue and decreasing cost. However, companies may employ different strategies in order to achieve this goal. Some of them focus on customer satisfaction and quick delivery, while others may be more concerned about minimizing inventory holding costs. d. In general, different parts of the supply chain have objectives that are not aligned with each other. 1. Purchasing: Stable order quantities, flexible delivery lead times and little variation in mix. 2. Manufacturing: Long production runs, high quality, high productivity and low production costs. 3. Warehousing: Low inventory, reduced transportation costs and quick replenishment capability. 4. Customers: Short order lead times, a large variety of products and low prices. e. Typically, the automobile dealer would like to offer a variety of car colors and configurations to accommodate different customer preferences, and meanwhile have a short delivery lead time from the manufacturer. However, in order to maximize the length of production runs, and utilize resources more efficiently, the manufacturer would like to aggregate orders from different dealers and offer less variety in car configurations. This is a clear example of conflicting marketing and manufacturing goals. ———————– 2. Consider a consumer mortgage offered by a bank. a. What are the components of the supply chain for the mortgage? . Is there more than one firm involved in the supply chain? What are the objectives of the firm or firms? c. What are the similarities between product and service supply chains? What are the differences? a. b. c. a. The supply chain for a consumer mortgage offered by a bank may involve various components. 1. Marketing companies that handle solicitation to potential customers. 2. Credit reporting agencies that evaluate potential customers. 3. The bank that extends the mortgage loans. 4. Mortgage brokers through which the loans are distributed. . The marketing companies strive to increase the response rate from homebuyers in order to maximize their returns. Banks aim at a customer portfolio with a relatively low risk, healthy flow of payments and low average loan maturity date. The brokers would like to maximize their sales commissions. c. Similar to product supply chains, the objective of a service supply chain is to provide what is needed (in this case, a particular type of service, rather than a physical product) at the right location, at the right time, and in a form that conforms to customer requirements while minimizing system wide costs. However, there are a number of differences between the two types of supply chains. For instance: 1. In a product supply chain, there is both a flow of information and physical products. In a service supply chain, it is primarily information. 2. Contrary to a service supply chain, transportation and inventory are major cost components in a product supply chain. 3. Services typically cannot be held in inventory, so matching capacity with demand is frequently more important in a service supply chain. 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. ——————————————————- 3. What is an example of a supply chain that has evolved over time? 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. 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