Group Members: 1. Shamsher Singh 133190004 2. Satish Kumar 134190005 3. Sandhya Tripathi 12I190005 4. Swapnil Renushe 133190008 5. Swaroop 133190003 6. Sanjeev 143190008

1) Optimal Strategy of an Assembler: The optimal strategy for an assembler would be to fulfill maximum potential demand available to him from the market while maximizing his profit by procuring the components at lowest possible price. Following this strategy he may try to buy components at a lower price than other assemblers if there is tight competition for procuring particular component. This will help him to ensure that no demand is wasted that is available in market for his products. As part of same strategy an assembler can also give priority to the product which gives him higher margin. Also, he should try to procuring the components according to his estimated production of both products so as to satisfy above criteria and to reduce the risk of being left with any unused components with him. 2) Optimal Strategy of a Supplier: The supplier should try to maximize his profit by selling the components available with him at maximum possible price which the assemblers are ready to pay. Also, a supplier’s strategy should be maximizing his profit through increased market share by giving competitive prices for components at certain point of time to capture larger demand. The optimal strategy for supplier is also to sell all of components available to him and avoid risk of being left with unsold component. If the supplier is aware of market demand and requirements of assemblers, he can try increasing his price to earn higher margins. 3) Can the supplier/assembler do better by collaborating? How do they achieve this collaboration? Yes, the assemblers and suppliers can both do better if they collaborate in a co-operative way. They can achieve mutual benefits by having awareness of supply chain as a whole and sharing knowledge of each other’s information. This will help in improving the efficiency of supply chain as a whole and both risks and revenues are shared by them. Assembler can share their market share, estimated demand etc. with suppliers so that suppliers can produce the components accordingly. Also, suppliers can share

information regarding their capacity so that assemblers can decide how much to procure from a particular supplier. The combined efficiency as a goal can also provide them long term benefits such as, assured supply/demand in times of severe market conditions. Assemblers and suppliers can reach an unwritten agreement backed up by desire for mutual benefits and fair trading or mat sign legally binding contracts. This way, the supply chain will behave as a unit and decisions taken would be optimal for both the suppliers and assemblers. Also, due to information sharing, assemblers will have enough components to satisfy the market demand and the inventory levels at suppliers will also be low, implying higher overall revenues.