LGMT 683 ASSIGNMENTS

LGMT 683

Post your answer to only one of the questions below. Begin your post with the question you are answering and then make your response.

1. Based on your own experience or research, briefly describe at least one example of a public or private enterprise that has outsourced the management of one or more of its supply chain related activities. Include in your answer the name of the firm, the name of the third party, and a brief statement regarding the benefits claimed. In your opinion, what are the downside risks?
2. Based on your own experience or research, briefly describe at least one example of a public or private enterprise that has offshored the management of one or more of its supply chain related activities. Include in your answer the name of the firm, the name of the third party, and a brief statement regarding the benefits claimed. In your opinion, what are the downside risks?
3. Supply chain-related electronic auctions have been increasing in sophistication and popularity over the years. Using the Internet, briefly describe at least one firm that offers electronic supply chain-related auctions and summarize the services they offer. Also, please share their Internet address with your classmates.
4. Please describe at least one example of a firm that is using dynamic pricing to increase revenue. Be as specific as possible.

Reply to at least two of your classmates on different topics than your original post.

CLASSMATES POSTS:

JACOB,

Based on your own experience or research, briefly describe at least one example of a public or private enterprise that has outsourced the management of one or more of its supply chain related activities. Include in your answer the name of the firm, the name of the third party, and a brief statement regarding the benefits claimed. In your opinion, what are the downside risks?

Over the last several decades, there has been an increasingly trend of companies outsourcing their products and services. There are many reasons contributing to this growing trend, which include how it increases a company’s flexibility, helps increase efficiency rates within companies, frees up internal resources, helps with risk management, can enable improved service levels, tax breaks, lower regulatory costs, allows companies to focus on their core competencies, and because often times, labor is much cheaper (“Top Ten Reasons to Outsource”, 2011, para. 1). An example of company who is outsourcing part of their business, is Apple. Apple outsources the majority of their production to Asian countries (Japan, China, Taiwan, etc.) for several reasons. Contrary to most beliefs, Apple does not outsource their production because of cheap labor, but because of countries like China and Taiwan, provide fast and efficient production methods (Kabin, 2013, para. 4). In outsourcing to companies like Taiwan Semiconductor, Apple is able to focus on the heart of their business, which includes their research and development, design, and marketing divisions. Additional benefits Apple experiences, is the cheap parts that are procured through their supplier, the tax breaks they receive, and the lower regulatory costs they experience. Although the company is experiencing an increase in their overall supply chain profitability, their image has been damaged over the last several years, as they are taking pressure from the American society to bring jobs back to the U.S. and how many believe they are engaged in unethical business practices overseas.

References:

Kabin, B. (2013, September 11). Apple's iPhone: Designed in California But Manufactured Fast All Around the World (Infographic). Retrieved December 3, 2015, from http://www.entrepreneur.com/article/228315 (Links to an external site.)

Top 10 Reasons to Outsource. (2011, November 8). Retrieved December 3, 2015, from http://www.supplychaindigital.com/supplychainmanagement/2329/Top-10-Reasons-to-Outsource

Bhushan,

 Please describe at least one example of a firm that is using dynamic pricing to increase revenue. Be as specific as possible.

Dynamic pricing, which is also known as yield management or revenue management, is a set of pricing strategies aimed at increasing profits. The techniques are most useful when two product characteristics co-exist. First, the product expires at a point in time, like hotel rooms, airline flights, or time-dated (“sell before”) products. Second, capacity is fixed well in advance and can be augmented only at a relatively high marginal cost. These characteristics create the potential for very large swings in the opportunity cost of sale, because the opportunity cost of sale is a potential foregone subsequent sale.

Airlines often use dynamic pricing to increase revenue. Almost every airline has its Revenue management department. Airline pricing in the United States is opaque. It is not uncommon for one-way fares to exceed round-trip prices. The difference in price between refundable and non-refundable tickets is often a factor of four or five. Prices change frequently, with low fares on a particular flight being available, then not, and then available again. Average prices for round-trips between Phoenix and Los Angeles differ depending on whether they originate in Los Angeles or in Phoenix. This is particularly mysterious in that the same airlines fly these round-trips with the same set of offerings.

American Airlines was the first to introduce dynamic pricing. Different prices are charged for different customers for the same seat. Prices depend on customer’s maximum willingness to pay. Customers who book way early are very price sensitive and usually pay less whereas those who book just few days before departure pay more as they are insensitive to price. Higher price is charged for peak hour flying like Monday mornings and Friday evenings and lower prices for non-peak hours like Tuesday afternoons when demand is low.

References

Chopra, S. & Meindl, P. (5th Edition). Supply Chain Management. Understanding the Supply Chain

Preston McAfee & Vera Velde, Dynamic Pricing in the Airline Industry

Retrieved from: http://vita.mcafee.cc/PDF/DynamicPriceDiscrimination.pdf (Links to an external site.)

Lisa Magloff, Dynamic Pricing Strategies

Retrieved from: http://smallbusiness.chron.com/dynamic-pricing-strategy-5117.html (Links to an external site.)

ONCE YOU ANSWER THE QUESTION, PLEASE RESPOND TO MY CLASSMATES POSTS INDIVIDUALLY, WHICH CAN BE POSITIVE AND NEGATIVE.

CHAPTER 15

5) For a manufacturer that sells to many retailers, why does a quantity flexibility contract result in less information distortion than a buyback contract?

8) Why do you think assembly in the consumer electronics industry is performed by third parties, whereas assembly in the auto industry is almost never outsourced?

CHAPTER !6

5) Explain the use of outlet stores by retailers such as Saks Fifth Avenue in the contest of revenue management. How does the presence of outlet stores help Saks, How does it help its more valuable customer, who is willing to pay full price?

CHAPTER 17

2) What are some advantages of the software as a service (SaaS) model? Why has it been successful in the CRM space?

4) Identify a few examples of when the availability of real-time information has been used to improve supply chain performance.

8.4 AADITIONAL HOMEWORK EXERCISE

Chapter 15: Sourcing Decisions in a Supply Chain

1. After reviewing the last three lines of Table 15-4 in your text, as the buy-back price for each disc increases from $0 to $6 while the wholesale price is held constant at $7, what happens to profits for the music store (the retailer) and the supplier (the manufacturer)? What about overall supply chain profitability? What is the lesson to be learned from this exercise?

The information presented in Table 15-4 assumes that there are no costs associated with returning the “buy-back” products to the supplier. As the transportation costs to return the goods being bought back increases, what happens to the profitability of the supply chain?

Chapter 16: Pricing and Revenue Management in a Supply Chain

2. Right click and download the Pricing to Multiple Segments data to your hard drive. What happens to prices and profitability when the sensitivity for customers that are willing to wait (i.e., segment 2) increases from 40p1 to 80p1? What did you learn from this exercise?

Note: Use the “Solver” capability under the ”Tools” menu (but you must set sensitivity in cell C6 to desired level before you run “Solver”).

3. Right click and download the Dynamic Pricing Data to your hard drive. What happens to the quantity purchased and profitability if the price sensitivity increases to from 1.8p3 to 1.9p3 in the third period? What did you learn from this exercise?

Note: Use the “Solver” capability under the ”Tools” menu (but you must set sensitivity in cell C8 to desired level before you run “Solver”).

*Note on using the “Solver" Add-In:The Solver Add-in is an Excel add-in program that is available when you install Microsoft Office or Excel. To use it in Excel, however, you need to load it first. You should have completed doing so in Module 3.

TABLE 15-4 AND BOTH DATAS ARE ALL ATTACHED.