SCM Assignment 11. i)

North Dealer

Goods Ordered Sale Difference Mod of Difference283 300 17 17267 75 -192 192258 800 542 542392 50 -342 342308 500 192 1921508 1725 217 1285

% Accuracy = (1-(1285/1725))*100= 26%

South Dealer

Goods Ordered Sale Difference Mod of Difference333 500 -167 167433 100 333 333367 200 167 167267 100 167 167133 150 -17 17

1533 1050 483 851

% Accuracy = (1-(851/1050))*100= 18.96%

This difference could be because of

Two month moving average forecasting not a correct method to forecast Demand fluctuation due to some market condition

1. (ii)

Tracking signal can be used to identify if over ordering is done or under ordering

TS=¿

TS of North Zone Dealer: Using the above table

RSFE = 217 MAD = 257 TS = 217/257 = 0.84

Therefore, North Zone dealer is biased towards over-ordering!

TS of South Zone Dealer: RSFE = -483 MAD = 170 TS = -483/170 = -2.83

Therefore, South Zone dealer is biased towards under ordering!

1. (iii)

Aggregate Forecasting is better in this case as one dealer is over-ordering and the other dealer is under-ordering.

Goods Ordered Sale Difference Mod of Difference616 800 184 184700 175 -525 525625 1000 375 375

659 150 -509 509441 650 209 209

3041 2775 -266 1802

The above table is obtained by adding the previous two tables of North Zone dealer and South Zone dealer respectively. Now, here the % Accuracy stands at 35% which is better than both dealers’ individual % Accuracy.

1. (iv) Aggregate forecasting for different values of α:

Month Sales Forecast(α=0.1) Forecast(α=0.2) Forecast(α=0.5) Forecast(α=0.7) Forecast(α=0.9)1 250 250 250 250 250 2502 700 250 250 250 250 2503 900 290 340 475 565 6554 800 351 452 687.5 799.5 875.55 175 395.9 521.6 743.75 799.85 807.556 1000 374.21 452.28 459.37 362.45 238.257 150 499.37 561.82 729.69 808.74 923.828 650 464.43 479.46 439.84 347.62 227.38

Total Sales = 2775

For(α=0.1) For(α=0.2) For(α=0.5) For(α=0.7) For(α=0.9)Total Absolute Deviation

2890.63 2834.68 2886.71 3009.01 3361.24

Error % 104.16 102.15 104.02 108.43 121.12

For all the assumed values of α, α=0.2 is the comparatively better assumption. But even for this value error % is huge.

2. (i)Development chain Plan/Design->Source->ProduceSupply chain Supply->Produce->Distribute->SellThey both intersect at produce phase.

The development chain is a set of activities associated with introduction of a new product into the market. It consists of product design phase, make or buy decision making, supplier selection, strategic partnerships, supply contracts and production plans.

The supply chain, on the other hand, consists of the activities and processes that need to be in place to ensure the supply of the product at the right place, at the right time and in the right quantity.

2. (ii)

The Council of Supply Chain Management Professionals’ glossary, defines both 3PL and 4PL, and is one I have found to be generally true across the board. The CSCMP defines 3PL as follows:

Outsourcing all or much of a company’s logistics operations to a specialized company. The term “3PL” was first used in the early 1970s to identify intermodal marketing companies (IMCs) in transportation contracts. Up to that point, contracts for transportation had featured only two parties, the shipper and the carrier. When IMCs entered the picture—as intermediaries that accepted shipments from the shippers and tendered them to the rail carriers—they became the third party to the contract, the 3PL. Definition has broadened to the point where these days, every company that offers some kind of logistics service for hire calls itself a 3PL. Preferably, these services are integrated, or “bundled,” together by the provider. Services they provide are transportation, warehousing, cross-docking, inventory

management, packaging, and freight forwarding. In 2008 legislation passed declaring that the legal definition of a 3PL is “A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”

Third-party logistics providers are: Freight forwarders Courier companies Other companies integrating & offering subcontracted logistics and transportation services

The CSCMP defines 4PL as follows:Differs from third party logistics in the following ways; 1)4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners; 2)4PL organization acts as a single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure.

However, 4PL was originally defined by Accenture as a trademark in 1996 and defined as “A supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization with those of complementary service providers to deliver a comprehensive supply chain solution.”, but is no longer registered.

4PLs have also been referred to as “Lead Logistics Providers”. Now a new crop of companies have emerged who are actual transportation companies too. While a 4PL is sometimes described as non-asset-owning service provider, their role is to provide broader scope managing of the entire supply chain.

2.(iii)

Postponement, or delayed product differentiation, is an example of push-pull strategy. In this strategy, the organization designs the product and the manufacturing process in such a way that the decisions about the specific product that is to be manufactured is delayed as long as possible. The manufacturing process starts by creating a generic product, which is later differentiated to a specific product only once the demand is revealed.