Comprehensive Analysis of Integrative Supply Chain Management

This report provides an analysis of integrative supply chain management, addressing key aspects such as the impact of trade promotions on cycle inventory, managerial levers for reducing lot sizes and cycle inventory without increasing costs, and the influence of facility operating costs on storage capacity. The report examines how trade promotions influence retailers and increase cycle inventory, ultimately leading to increased lot sizes. It suggests managerial strategies like adjusting sales incentives and offering quantity discounts to mitigate these effects. Additionally, the report explores the implications of different facility operating costs, advocating for adjustments in storage capacity through techniques like rack elevations and flow rail systems. It highlights the importance of selecting the right storage solutions based on the specific environment, referencing key publications in the field to support its claims.

Running Head: Integrative supply chain management
Integrative supply chain management
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1)Impact of trade promotion in cycle inventory?
The manufacturers use different trade promotional schemes to offer a discounted price over the
time period , up to which the discount will be effective. The ultimate goal of the trade promotion
is to achieve the manufacturers objective by influencing retailers. (Lee ,2017)The key objectives
of 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 the
ultimate customer.
The use of trade promotions will lead to the increase in the cycle size and the lot size of the
inventory because of the buying impulse created by the retailer for the ultimate consumer,which
will 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 chain
without increasing cost?
The managerial levers that will reduce the lot size and the cycle inventory in a supply chain
without increasing cost are-
 The change that will lead to the reduce the incentive of the sales person for pushing
the 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 units
to 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 is
the offering of quantity discounts on the volume based orders, which will eliminate

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the incentive that will increase cost , by making the total purchases in lots rather than
purchase in the single lot.
3)Do different facility operating costs make it advisable to shrink storage capacity in some
facilities and expand it in others?
As part of you explanations, please include specifics on what options worked/did not work?
 Yes , differential facility operating costs make it advisable to shrink storage capacity in
some facilities and expand it in others. when the working storage capacity of the
warehouse achieves the 85% utilization level , in that case, the storage reduction in
warehouse leads to the reduction in the productivity level of a warehouse.
(Heizer ,2016)The options that will be worked in this condition are the uses of Rack
elevations , flow rail systems, pallet runner shuttle system etc.in which the changes are
made in the racking system which will increase the storage capacity.
 As a specific statement in this reference, we can say , that there is no such best system
which is suitable for the storage facility as some systems work better in the certain
environment and vice versa.
References:
Lee, H. L., Padmanabhan, V., & Whang, S. (2017). The bullwhip effect in supply chains. Sloan
management review, 38(3), 93.
Ross, D. F. (2013). Competing through supply chain management: creating market-winning
strategies through supply chain partnerships. Springer Science & Business Media.

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Heizer, J. (2016). Operations Management, 11/e. Pearson Education India.