QSO 630 - Supply Chain Management: Module One Homework Solutions

This homework assignment provides a detailed analysis of supply chain management principles through a Meditech case study and a discussion of retail challenges. The assignment addresses issues related to inventory management, forecasting, customer service, and the impact of online retailing. It explores problems such as high inventory levels, inaccurate forecasting, and long lead times, and offers solutions including improved communication, centralized production facilities, dedicated forecasting teams, and the implementation of just-in-time inventory strategies. The assignment also examines demand forecasting, pricing strategies, and value creation in the retail sector, including the importance of customer experience, brand value, and value-added services. Furthermore, it discusses the role of internet-based experiences and performance measures for both retailers like Amazon and the supply chain itself. This assignment is a comprehensive exploration of key concepts in supply chain management, offering practical solutions and insights into real-world scenarios.

Running head: MODULE ONE HOMEWORK
moDULE ONE HOMEWORK
QSO 630: Supply Chain Management
[DATE]
[Company name]
[Company address]

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MODULE ONE HOMEWORK
Meditech Case Study
Answer 1: After reviewing the case study, there are various issues identified in the process of
introduction of new products. At the time of initial orders, which were high in quantity, Meditech
was not successful to keep itself aligned with the high demand. Meditech was also not efficient
in forecasting, as many times, it had faced shortages in the stocks. This is because the data that
was used to assess the forecast exactly was not forecasted before and demanded the information
that is to be kept. As well as the customers faced the waiting for the six weeks and the orders that
was fulfilled. In the industry of health care, this was fatal and the surgical team who rely on
having correct instruments that was required to work and be the lifesaving boat for the patients.
The large variance in lead ties of components was the significant issue while manufacturing the
products. The lead time was from 2-16 weeks for the parts of components (Levi, et al., 2008).
This led to another significant issue of high inventory level. Also, the operations regarding
assembly and packaging are the schedules which are based on various systems. While the
operations reading assembly is done on the basis of forecasting, the operations of sterilization
and packaging is scheduled on the basis of replenishment needs of inventory of finished goods. If
there is lack of finished goods and the forecast is too high, it can lead to increased delivery time.
Finally, there is high variation in the level of production which do not match with the difference
in demand which may again lead to excess of inventory available in selected months only.
Answer 2: These issues systematically are driven by various factors like panic ordering in which
an affiliate or dealer is not sure about whether the product will get achieved on time and thus ay
increase the order size so that the Meditech may be able to deliver minimum part of the order.
Due to the bad reputation of Meditech regarding the delivery time taken by Meditech, huge
orders get placed which may lead to huge inventory level as well as big manufacturer demand.

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Another significant cause can be no documentation to help in predicting the forecast in future.
Also it can be observed that a decentralized facility of production has been proved to be a
nightmare in scheduling the processes o the company. As per the organization, significant factor
who drive these issues is the fear of management to lower the inventory. A consultant has
suggested that the inventory of Meditech may be lowered to 40% and they may still keep up with
the demand forecasted, but the fear of management says that it will still cause or damage to the
performance that is already subpar (Hunt, et al., 2015). It appears as per the figure 1.6 that the
departments are not dependent on each other and it may cause issues in the responsibilities and
demerits in production times. Lastly, it can be observed that non availability of dedicated team of
forecasting led to poor forecast of production and longer lead times and services.
Answer 3: The manager for customer services, Dan Franklin, was the first man to notice all these
as he was on front line while dealing with their customers. After having the meetings with
managers of hospital materials, Dan realized that the full scope of frustration of customers. He
heard from end users directly and forced to investigate the concern and the issues which are
caused internally.
Answer 4: Firstly a good communication is required between the departments and each of the
department should be well aware of the functioning of the other department to help the
customers better. Meditech must consider the centralized facility of production where packaging,
bulk instruments and assembly are being done in single facility, and thus keep both the
production level on same system of forecasting and closer to each other. It is required for the
company to have a dedicated team of forecasting to predict better the demand, which may lead to
good cost of turn around and component ordering procedure which may help to lower the
window of 2-16 weeks and may also launch and introduce the just in time strategy of inventory

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in which the materials are ordered when they ae required in the process of production and are
received on time. A good forecasting may cause inventory reduction and thus lower cost and the
company is able to do investment in the savings in some other opportunity like in customer
services and improved marketing.
Sources:
Hunt, J. (2015). The “Just In Time” Method. Retrieved April 03, 2017, from
www.smallbusiness.chron.com
Levi, D., & Kaminsky, P. (2008). Chapter One: Introduction To Supply Chain Management.
In Designing and Managing the Supply Chain: Concepts, strategies, and Case Studies. 3rd ed.
Boston: Irwin/McGraw-Hill.
Chapter Twelve Discussion Questions
Answer 1: In the traditional approach of retailing, Price gets driven by quality as if the quality is
high of a product, the price will also be high. Also, the customer experience of one-to-one
interaction and the physical touching of the product by the customer before buying it adds
significant value to the product at high tag of price. Retailers in online market sell directly to the
consumers and skip the middle man of brick and mortar locations of traditional approach. This
may help to keep the price low, but the overall quality of the product like personal attention is
also lowered. To cope with this issue, the E-Tailers have thought of enhancing the experience of
online shopping. For example, the E-tailer in clothing segment can identify the requirements of a
customer as per his historical purchase and may also recommend new styles and products.

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MODULE ONE HOMEWORK
Answer 2: (a) Company find it tough to stay abreast with the demand as the capacity gets
decreased. A flexible strategy of price gets adjusted based on the inventory which is available.
For example, the availability of oil in high quantity at gas pump lowers the price and vice-versa.
(b) Companies use best policies to forecast the demand and keep proper levels of pricing and
inventory. However, it becomes impossible sometimes to be certain regarding accuracy of
forecast. If the strategy of tailored pricing gets changed as per the market, It may give the
organization a high chance to maintain the pricing and competitive pricing by having a strong
comparison with fixed pricing strategy and forecast.
(c) Demand is a function of seasonality ad price and the firm will prepare itself with the
customized strategy of pricing. For example a room of a hotel may cause low amount on off
season and double the amount in high season. This may be termed as a seasonal opportunity
which the customers may be willing to pay.
Answer 3: (a) Conformance to requirements is a dimension of consumer value which refers to
capability to match demand and supply. The skill to provide the customers what they need and
want is the basic requirement I which the management of supply chain contributes in creating the
selection and availability. This function is also known as market mediation which greatly
influence the supply chain because it affects the conversion ability of raw materials to end goods
as well as delivering to customers.
(b) Retailers are given the task to determine how many services and products to be offered.
Many of the products are coming in wide variety and thus they require the retailers to form a
diverse and large inventories. Few of the ways to lower the cost of inventory involve using the

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approach of build to offer as done by Dell or get specialized in offering single product and
therefore keep the inventory lean and simple.
(c) Cost is considered as a significant component of price. Decisions regarding supply chain
determine the transportation and inventory cost and also affect the company’s ability to provide
low prices. Though price cannot be considered as a single and sole factor to be considered by the
customer, there can be range of narrow price which is acceptable for few of the products. Thus, a
brand does plays an important role in decisions of supply chain as the consumers are comfortable
to buy the brand name irrespective of the prices because for them a brad offers high quality and
steady supply of all products.
(d) Value added services like maintenance and support are significant factor to purchase few
orders. For example, an organization who is offering its customer with the facility of replacement
of product must ensure ample product supply to fulfill this feature and facility.
(e) In the case of Dell, the entire process of purchasing by large customers are managed by the
DELL which includes special customized features. This requires the supply chain to have high
flexibility in the distribution and production to accommodate the demands which are customer
specific. Forming and developing these kinds of relationship may take high time but they also
impact greatly on the huge volumes of sales. Also a good relationship may lead to switching of
customers to another brand tougher and thus lower the worries regarding high inventory level.
Answer 4: (a) Starbucks provides strong access to customers by securing prime locations of real
estate along with specialization in single product line as well as offering an environment which is
pleasant for enjoyment of the products.

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(b) The Gap lead to Value by providing a strong brand which is known for the reasonable prices
and quality therefore allowing the customers to feel that they have obtained the best product at
low price.
(c) Expedia.co helps to bring the value of customers by providing a huge variety of products in
on single location. Customers are allowed to book the rental cars, hotels and flights and even
concert and theatre tickets when they come to their destination (Levi, et al., 2008).
Answer 5: Examples of Internet based experiences include:
 Newsletters can be sent by the e-mail regularly.
 On-Line services of customers
 Cater the experience of shopping for every customer on the basis of the past data of
shopping.
 Ease of accessing the data from smart phone, computer and any other device lie tablet.
 E-rooms and classrooms developed by the organizations for the people to be together to
share similar interest and enthusiasm regarding g the product of company. Additionally,
the participants can comment in these E-rooms for giving their suggestions as it
encourages them to flow their ideas and opinions.
Answer 6: The possible measure for performance for Amazon.com involve:
 Loyalty towards Customers
 The Average order size
 High traffic level to website
 Few items of tradition like net profit, revenue and sales.
Possible measures of performance for supply chain involve:

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MODULE ONE HOMEWORK
 Delivery On time
 Inventory rate of turnover
 Rate of items which are returned
 Fill rate
Sources:
Levi, D., & Kaminsky, P. (2008). Chapter One: Introduction To Supply Chain Management.
In Designing and Managing the Supply Chain: Concepts, strategies, and Case Studies. 3rd ed.
Boston: Irwin/McGraw-Hill.