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Integrative Supply Chain Management: Impact of Trade Promotion, Managerial Levers, and Facility Operating Costs
Added on -2019-09-25
This article explores the impact of trade promotion on cycle inventory, identifies managerial levers to reduce lot size and cycle inventory, and discusses the advisability of shrinking storage capacity in some facilities and expanding it in others. It also includes specific options that have worked and not worked in this regard. The subject is integrative supply chain management, and the course code and college/university are not mentioned.
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Running Head: Integrative supply chain managementIntegrative supply chain management[Document subtitle][DATE][COMPANY NAME][Company address]
Integrative supply chain management11)Impact of trade promotion in cycle inventory?The manufacturers use different trade promotional schemes to offer a discounted price over thetime period , up to which the discount will be effective. The ultimate goal of the trade promotionis to achieve the manufacturers objective by influencing retailers. (Lee ,2017)The key objectivesof trade promotion from the point of view of a manufacturer are as :Encourage retailers for using price discounts, and displays.The inventory will be shifted from the manufacturer to the retailer and then to theultimate customer.The use of trade promotions will lead to the increase in the cycle size and the lot size of theinventory because of the buying impulse created by the retailer for the ultimate consumer,whichwill ultimately lead to the reduction in the supply chain profits.2)Identify managerial levers that reduce a lot size and cycle inventory in a supply chainwithout increasing cost?The managerial levers that will reduce the lot size and the cycle inventory in a supply chainwithout increasing cost are-The change that will lead to the reduce the incentive of the sales person for pushingthe product to the retailer will ultimate leads to the reduction in the bullwhip effect,and the manager will link the incentive of the sales people indirectly selling the unitsto the customer and not to the retailer .(Ross,2013). The other managerial lever that will help in reducing the lot size in the supply chain isthe offering of quantity discounts on the volume based orders, which will eliminate
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