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In a supply chain network, the distribution center (DC) provides which of the following functions for the factory?
In a supply chain network, the distribution center (DC) serves as a critical intermediary between the factory and the customer. One of its primary functions is to act as a buffer from customer demand. Here's how:
Demand Buffer: The DC holds inventory closer to the customer, absorbing fluctuations in demand and ensuring that the factory can operate more smoothly without frequent production changes.
Stock Management: By storing finished goods, the DC ensures that products are available for quick delivery, reducing lead times and improving customer satisfaction.
Flexibility: It provides flexibility in the supply chain, allowing for adjustments to be made in response to market changes without impacting factory operations directly.
Efficiency: This buffer role helps in maintaining efficient production schedules at the factory level, as the factory can produce in larger, more economical batches without the need to respond instantly to every change in customer orders. Overall, the DC helps to decouple production schedules from customer order cycles, enhancing both efficiency and responsiveness. Reference:
'The Role of Distribution Centers in Supply Chain Management' - Logistics Management
'Buffering Supply Chain Demand with Distribution Centers' - MIT Sloan Management Review
The primary business advantage of developing an international supply chain is to:
The primary business advantage of developing an international supply chain is to realize economies of scale in production and distribution. Here's why:
Economies of Scale: By sourcing and manufacturing on a global scale, companies can produce larger quantities at lower costs per unit. This includes benefits from bulk purchasing of raw materials and components.
Cost Advantages: Access to lower-cost labor and materials in different regions can significantly reduce production costs.
Market Expansion: An international supply chain allows companies to distribute products to a broader market, increasing sales volumes and spreading fixed costs over a larger base.
Specialization: Companies can take advantage of specialized skills and technologies available in different countries, enhancing production efficiency and product quality.
Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
A return material authorization (RMA) policy is used in reverse logistics to:
Context: Return material authorization (RMA) policies are used in reverse logistics to manage returns efficiently.
Options Breakdown:
A . Physically transport returned items by using an efficient transportation mode: While efficient transportation is important, it is not the primary focus of RMA policies.
B . Minimize the number of returned items by involving product design and demand forecasting: This goes beyond the scope of RMA policies, focusing more on product lifecycle management.
C . Reduce the cost of returned items by refusing to accept items that should not be returned: RMA policies help in screening returns, ensuring that only valid returns are accepted, thereby reducing costs associated with handling and processing unnecessary returns.
D . Reclaim substantial value from returned items by recycling: This is a part of the reverse logistics process but not the primary focus of RMA policies.
Correct Answer Justification: RMA policies are designed to authorize returns before they are shipped back, ensuring that only items meeting return criteria are processed, thus reducing unnecessary return costs.
Reverse logistics and return management literature
Case studies on the implementation of RMA policies
Total line-haul costs vary directly with:
Total line-haul costs are the expenses associated with the transportation of goods over long distances and vary directly with the distance shipped. Here's how:
Distance Dependency: As the distance between the origin and the destination increases, the cost of transportation proportionally increases due to fuel consumption, driver wages, and vehicle maintenance.
Fixed and Variable Costs: While there are fixed costs involved in line-haul transportation, such as loading and unloading, the variable costs increase directly with the distance traveled.
Economies of Scale: Though longer distances can benefit from economies of scale, the overall cost will still rise with increased distance.
Freight Rates: Transportation companies typically set their freight rates based on distance brackets, making the cost calculation straightforward for longer hauls. Understanding that total line-haul costs are distance-dependent helps in planning and optimizing transportation routes effectively. Reference:
'Transportation Cost Analysis' - Transport Economics Journal
'Logistics and Supply Chain Transportation Costs' - Journal of Business Logistics
Which of the following benefits should a supplier expect to receive by becoming a certified supplier?
Becoming a certified supplier typically involves meeting specific quality, delivery, and performance standards. Certified suppliers benefit from streamlined processes, such as reduced inspections, fewer audits, and faster payment cycles, which eliminate redundant procedures. This certification indicates a high level of trust and reliability, allowing both parties to reduce administrative burdens and focus on more value-added activities. While other benefits like price increases or competitive information might occur, the primary advantage is operational efficiency and process optimization. Reference:
APICS Dictionary
'The Procurement and Supply Manager's Desk Reference' by Fred Sollish and John Semanik
