Operation Management Chap 10

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10 Supply Chain Management Strategy and Design Answers to Questions 10-1. McDonalds: The company is supplied by food distributors and restaurant product suppliers (for plates, napkins, etc.). Production is located in retail sites that are usually small and are near large easily accessible customer markets. Their inventory levels are typically small because food cannot be stored in large quantities. Their primary mode of transportation is trucking. Toyota: Toyota suppliers include raw materials and auto parts. They receive some items on-demand for JIT production and some is stored in warehouses. Production is in large plants with heavy-machinery in close proximity to good transportation sources. Toyota plants are located all over the world as are their distribution systems. Transportation is by all modes of transportation. 10-2. The strategic goals are low cost and customer service. Purchasing from suppliers must be on time or the entire supply chain is delayed, creating late deliveries to customers. Erratic and poor quality supply can also increase costs. If facilities are not located properly it can delay product or service flow through the supply chain, and increase costs for longer deliveries. Production inefficiency and poor quality can cause delays in product or service flow and it also creates the need for more inventory which increases cost. Inefficient transportation can also result in higher inventories to offset delays and raise costs, and, causes delayed delivery to customers. 10-3. Answer depends on the businesses selected. 10-4. Answer depends on the example the student selects. One example is a grocery chain that uses POS terminals to send information sales to distribution center who, in turn, sends mixed loads to the store by truck weekly. 10-5. The answer depends on the company the student selects. 10-6. Answer depends on the e-marketplace
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