Discuss why supply chain profits may be hurt by a retailer making lot sizing decisions with the sole objective of minimizing its own costs. What advantage would result if the entire supply chain could coordinate this decision?
Answer to relevant QuestionsWhen are quantity discounts justified in a supply chain? Consider a firm like Zara that has developed production capabilities with very short replenishment lead times. Do you think this capability is more valuable for its online operations or its store operations? Why? Why can a Home Depot with a few large stores provide a higher level of product availability with lower inventories than a hardware store chain such as Tru-Value, with many small stores? What are some scenarios in which postponing product differentiation across all products may not be profitable? How can tailored postponement help in such situations? Discuss key drivers that may be used to tailor transportation. How does tailoring help?
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