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Supply Chain Management Exam

The Bis Corporation

In order to make a decision about the network configuration of the Bis Corporation,

information about the cost of storage in both primary and secondary warehouses is needed.

Secondly, transportation time should be considered. Also, possible sizes and frequencies of

delivery (concerted with customer demand) are important. Finally, it is necessary to consider

other transportation modes, as well as the cost and time of transportation between secondary

warehouses, as some of them can be closer to each other than to the primary warehouse.

American Tool Works

Due to VMI agreements with midsize and small distributors, ATW may face certain

risks. These distributors may be less competent in various products and customer needs, as they

have fewer possibilities to access a good market analysis. They are likely to have lower stock

levels than large distributors. For ATW, it will be more time and cost consuming to make

deliveries as frequently as with large distributors. It will be more difficult for ATW to manage its

inventory at these distributors facilities and monitor demand. This can influence its production

and make ATW less adaptable. On the other hand, midsize and small distributors may face the

risk of delays due to an increased number of distributors that ATW should serve (D. Simchi-

Levi, Kaminsky, and E. Simchi-Levi, 2007, p. 124). Also, they are less likely to get discounts, as

they are less likely to make bulk purchases. This increases the risk of higher pricing.

Meditech Surgical

1. The major Meditech Surgicals problem is customer dissatisfaction. This is connected

to another problem, namely delays in delivery of its products, especially new ones, when demand

increases greatly immediately after their introduction. Inability to meet this increased demand

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points to the problems of limited product capacity and improper delivery service. Thus, overall

customer service suffers and becomes uncompetitive.

2. One of the reasons for poor delivery is strong reliance on dealer network. Dealers may

not consider end customers needs immediately due to managing many products and may cause

delivery to be late. Second reason is improper demand forecasting. This is connected to another

cause of the companys problems, namely low reliance on real demand and needs. One more

reason is the absence of common data on different warehouses and zones, which makes

forecasting less reliable. Also, high inventory levels are likely to make the company less

adaptable. Finally, panic ordering adds greatly to the companys problems of manufacturing and

supplying (D. Simchi-Levi, Kaminsky, and E. Simchi-Levi, 2007, pp. 18-19, pp. 23-24)

3. So, the company should consider the possibility of selling more to end-customers and

enabling them to order beforehand. The elements of the pull system should be used, especially in

terms of inventory storage and demand forecasting. Additionally, Meditech Surgical should

improve its planning while drawing long-term contracts and agreements. Also, the monitoring of

orders and inventory should be improved.

Reebok

1. The major problem faced by Reebok is high demand uncertainty. The popularity of its

replica jerseys is determined by sport events. The football team that wins creates the biggest

demand. This is even truer for team players becoming unexpected winners. So, it is very difficult

to meet unexpected shifts in demand and plan production. Moreover, Reebok may have losses

due to already unpopular jerseys (D. Simchi-Levi, Kaminsky, and E. Simchi-Levi, 2007, p. 173).

2. One of the major causes of Reeboks problems is unpredictability of sport games and

their results. Also, teams may change their colours and emblems. Football players can suddenly

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leave their careers or become very successful. Besides, it is difficult to find effective forecasting

techniques that could provide more precise results. Another factor is lead time and time of blank

jersey production. Additionally, the inventory of blank jerseys adds to the planning problem. On

the other hand, limitations for minimal orders with manufacturers bound Reeboks flexibility.

3. Therefore, Reebok should improve its forecasting techniques by involving specialized

experts information. Also, it should decrease its lead time through better planning and try to cut

production time. In this context, it may consider choosing other manufacturers that are located

within a closer distance. Additionally, Reebok can sell its leftover jerseys in other countries or in

other places, where the colors and teams are still popular.

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References

Simchi-Levi, D., Kaminsky, Ph., and Simchi-Levi, E. (2007). Designing and Managing the

Supply Chain. Concepts, Strategies, and Case Studies (3rd. ed.). New-York, NY:

McGraw-Hill.