CSCP - Certified Supply Chain Professional Exam

Improved information throughout the supply chain can lead to the de-emphasis of safety stock for the following reasons:

• Enhanced Visibility: Improved information systems provide better visibility into inventory levels, demand forecasts, and supply chain activities, enabling more accurate planning and inventory management.
• Accurate Forecasting: With better data and analytics, companies can make more accurate demand forecasts, reducing the need for excess safety stock to cover unexpected demand fluctuations.
• Real-time Data: Real-time information allows for quicker responses to changes in demand or supply conditions, minimizing the reliance on safety stock as a buffer.
• Collaborative Planning: Sharing information with supply chain partners facilitates collaborative planning and replenishment strategies, reducing the uncertainty that safety stock is meant to mitigate.

References:

• Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
• Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain. McGraw-Hill.

The most appropriate type of raw materials to source via an Internet-based trading exchange is inexpensive material for which there are many sources. This involves:

Broad Supplier Base: When there are many suppliers available, an Internet-based trading exchange can provide a platform to compare prices and availability easily. 2. Low Cost: For inexpensive materials, the cost savings from competitive bidding and efficient procurement processes outweigh the transaction costs associated with online exchanges.

• Commoditization: Materials that are widely available and standardized are well-suited for trading exchanges, as the quality and specifications are generally consistent across suppliers.
• Efficiency: Internet-based trading exchanges streamline the procurement process, reducing the time and effort required to source materials and potentially lowering procurement costs.

References

• "E-Procurement: From Strategy to Implementation" by Dale Neef
• APICS, "Strategic Sourcing in Supply Chain Management"

The proposed merger between the retailer and one of its manufacturers, giving the manufacturer sole responsibility for a product family, is an example of vertical integration. Here’s why:

• Control Over Supply Chain: Vertical integration involves merging with or acquiring firms at different stages of the production process (e.g., a retailer merging with a manufacturer).
• Quality Control: By integrating vertically, the retailer gains better control over the production process, helping to ensure consistent product quality.
• Supply Chain Efficiency: Vertical integration can streamline operations, reduce costs, and improve coordination between production and retail.
• Reduction of Variability: The direct oversight and alignment of production processes can reduce variability in quality and improve overall supply chain performance.

References:

• Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
• Harrigan, K. R. (1985). Vertical Integration and Corporate Strategy. Academy of Management Journal.