chapter 4

Question 1

Discuss the challenges of aligning supply and demand

Answer 1

1.large product portfolio.the more products you have the more difficult it becomes to allign supply and demand.
2. shorter product life cycles.cust wants products faster to the market and newer products.
3. the larger the customer base is the more difficult it is to allign supply and demand
4. large geographic area.
5. longer supply lead times
6. complex freight mix where multiple transport modes needs to be used.
7.economies of scale
8. production complexities
9. high staff turnover as skills are lost

Question 2

Explain the internal causes of demand volatility in supply chains.

Answer 2

1.Payment terms.Customers adapt their ordering patterns according to payment terms which have an impact on demand volatility.
2. Sales and marketing promotions.more demand than usual.
3. Order policies.minimum order policies.
4. Complexity of the distribution system.the more pleyers the are the greater risk of bullwhip effect.
5. Product focus.more demand for one product but cust ignoring other products.
6. Production maintenance such ass broken machine.
7. Distance between supply and demand

Question 3

Describe the traditional approaches to aligning supply and demand.

Answer 3

improve demand forecasting.
optimise production and inventory plans
reduce lead times

Question 4

Explain new approaches to aligning supply and demand

Question 5

Describe how to reduce supply lead time.

Answer 5

Efforts to reduce supply lead time in the past have mainly been to focus on
departmental or functional cost reduction such as reducing production costs.In more recent years organizations have realized that a cross functional approach to
reducing lead time results in improved total supply chain costs. By becoming more
flexible, supply chains are able to respond quicker to customer needs resulting in
improved overall profits

Question 6

explain how to increase demand lead time

Answer 6

The best way to increase demand lead time without the customer having to wait longer for products is to collaborate and share information on actual customer demand.
Two strategies to improve demand lead time include:
* Pushing the planned demand penetration point up the chain
* Pushing the actual demand penetration point up the chain

Question 7

what problems can arise if supply and demand is not aligned

Answer 7

1.lost sales due to insufficient inventory.
2. high inventory cost due to producing to much inventory.

Question 8

Explain the external causes of demand volatility in supply chains

Answer 8

1.Customers are reducing product life cycles.
2. Manufacturers are reducing product life cycles through introduction of more innovative products.
3. Unavailability of end consumption data(spaza shops)
4. Reluctance to share sales data.
5. Weather and climate
6. political challenges
7. Changes in legislation
8.Unreliable logistics infrastructure of source countries
9. Poor communication throughout the supply chain