Chapter 3

It is said that sourcing decisions are always an important factor affecting the supply chain
performance for all industries. Are there any exceptions to this?

Sourcing decisions are crucial because they affect the level of efficiency
and responsiveness in a supply chain as its goal to increase the size of the total surplus.
and responsiveness in a supply chain as its goal to increase the size of the total surplus.
and responsiveness in a supply chain as its goal to increase the size of the total surplus
and responsiveness in a supply chain as its goal to increase the size of the total surplus
 it is said that sourcing decision are always an important factor affecting the supply chain
performance for all industries. is there any exception to this?
Sourcing decisions are crucial because they affect the level of efficiency and responsiveness in
supply chain as its goal to increase the size of the total surplus.
 The flow of information has become more and more important in supply chain management.
Describe the key impacts of information on supply chain performance in terms of
responsiveness and efficiency with reference to the logistics industry.
-Demand planning is mainly estimation and forecasting of the future demand according to
several factors as historical sales. A good demand plan and estimation of errors leads to a
balance in the responsiveness and efficiency of supply chain planning.
-Coordination and information sharing occur when all stages of a supply chain work toward the
objective of maximizing total supply chain profitability based on shared information. With high
collaboration in sharing information among stages results in responsiveness and efficiency in
supply chain performance.
-Sales and operation planning is critical as it affects both the demand on a firm’s suppliers and
the supply to its customers
 How can the full set of logistical and cross-functional drivers be used to create strategic fit
for a PC manufacturer (say DELL) targeting both time sensitive and price conscious
customers?
For PC manufacturer to target both types of customers, an expansion of the manufactures are
necessary for time sensitive customers to reduce the distance, also, am enhancement on the
transportation could be done for faster deliveries. Additionally, those manufacturers could invest
new inventories with lower price that functions well to fit the price conscious customers.
However, all those suggestions to be implemented will be costly to the company.
 "Price decisions only affect the buyer’s behavior and not the responsiveness of the supply
chain" Comment on this proposition with reference to shipping logistics
By taking shipping logistics as our main example here, there are quite a number of online
retailers carrying out shipping processes such as Amazon, Taobao internationally and also
Lazada, Shopee locally. Any purchasing made on their platform is delivered to the consumer
through shipping logistics. In fact, they offer very similar shipping options which is a higher
shipping fee for faster delivery and lower shipping fee for slower delivery. For instance, Amazon
charges a standard delivery (3-5 business day) at $4.98, two-day shipping at $14.97 one-day
shipping at a cost of $24.97 and free shipping (5-8 business day). Similar to Taobao, it charges
higher for direct shipping (approximately 2 weeks for Malaysia) and lower for consolidation
shipping (2 weeks - 1 month for Malaysia, longer for festival sales). We would strongly agree on
the first part, which states price decisions affect consumer behavior. These pricing decisions and
strategies applied to shipping logistics, which levels the shipping fee according to delivery time,
have really allowed the online retailer to affect the consumer behavior of the market. Generally
speaking, the customers who focus on efficiency would opt for the lower cost delivery even
though it takes longer time. In a more extreme way, Amazon providing a variety of shipping
choices even classifies the consumer behavior into more detail. An efficient customer could
decide how much he wants to save his cost and how long he can wait for the goods before he
chooses a shipping option. In this situation, we can expect that customers choosing the free
delivery have a higher degree of efficiency compared to those choosing standard delivery and
thus categorize them as ‘very efficient focusing’ and ‘averagely efficient focusing.’ Similarly,
customers focus on responsiveness tend to opt for a faster delivery in spite of its cost. And so, it
is quite apparent that not price decisions affect the consumer behavior in terms of their degree of
responsiveness and efficiency focusing

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It is said that sourcing decisions are always an important factor affecting the supply chain

performance for all industries. Are there any exceptions to this?

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