MKTG 3310 EXAM 3 QUESTIONS AND VERIFIED
ANSWERS
supply chain - Answers - a set of 3+ companies directly linked by 1 or more upstream
flows of goods and services, finances, and information from source to customer
How do supply chains deliver value? - Answers - leverage resources and skills of
various component firms
distribution channel - Answers - intermediaries, such as wholesalers, distributors, and
retailers, through which the flow of goods and services, financial resources, and
information travels
How do distribution channels add value? - Answers - taking customer orders, making
product available to ship, storing product, shipping product to next step in supply chain
supply chain network - Answers - a network of companies made up of many suppliers,
selling to many immediate customers
supply chain orientation - Answers - a critical management philosophy that guides the
actions of company members toward the goal of managing the flows across the supply
chain to create value
Supply Chain Management (SCM) - Answers - actions taken to coordinate various flows
within the supply chain
How does SCM create customer value? - Answers - if companies focus on the greater
good of the total system of companies vs the individual company
inventory carrying costs - Answers - The costs required to make or buy a product,
including risk of obsolescence, taxes, insurance, and warehousing space used to store
the goods.
supply chain integration - Answers - Improves entire chain's performance
What kind of strategies help the bottom line in the long-term? - Answers - Relationship-
based strategies
Push (speculation) strategy - Answers - a company builds goods based on a sales
forecast, puts those goods into storage, and waits for customers to order the product
When is a push strategy used? - Answers - Maturity stage
, What are the pros of the push strategy? - Answers - Firms can achieve economies of
scale and can positively affect the customer service by shortening turnaround time
What are the cons of the push strategy? - Answers - -If sales forecast is wrong, may
result in too much/not enough product
-Expensive and time-consuming if retooling needed or demand changes
-Inventory carrying costs are expensive
Pull (responsive supply chain) strategy - Answers - customer orders drive
manufacturing and distribution operations
When is pull strategy used? - Answers - early in product life cycle
What are the pros of pull strategy? - Answers - -Eliminates risk of producing unwanted
products
-Products can be customized
-Minimal inventory carrying costs
-Rapid response to changing market conditions
What are the cons of pull strategy? - Answers - -Doesn't allow for economies of scale;
orders are small
-Difficult to achieve flexibility for production and distribution
Hybrid (push-pull) strategy - Answers - the initial stages of the supply chain operate on
a push system, but completion of the product is based on a pull system
What are the pros of the hybrid strategy? - Answers - -Combines economies of scale
with flexibility
-Produces more accurate sales forecasts
What are the cons of the hybrid strategy? - Answers - -May not be as cost competitive
as push system
-Firm incurs costs to store parts in inventory
What are 4 things to consider in a SCM strategy? - Answers - -Stability of demand
-Degree of cost competitiveness
-Degree of customization
-Speed at which customers need product
Logistics - Answers - the part of SCM that plans, implements, and controls the flow of
goods and services, and information between the point of origin and the final customer
What are the impacts of logistics on place? - Answers - deliver products and services to
the right location
ANSWERS
supply chain - Answers - a set of 3+ companies directly linked by 1 or more upstream
flows of goods and services, finances, and information from source to customer
How do supply chains deliver value? - Answers - leverage resources and skills of
various component firms
distribution channel - Answers - intermediaries, such as wholesalers, distributors, and
retailers, through which the flow of goods and services, financial resources, and
information travels
How do distribution channels add value? - Answers - taking customer orders, making
product available to ship, storing product, shipping product to next step in supply chain
supply chain network - Answers - a network of companies made up of many suppliers,
selling to many immediate customers
supply chain orientation - Answers - a critical management philosophy that guides the
actions of company members toward the goal of managing the flows across the supply
chain to create value
Supply Chain Management (SCM) - Answers - actions taken to coordinate various flows
within the supply chain
How does SCM create customer value? - Answers - if companies focus on the greater
good of the total system of companies vs the individual company
inventory carrying costs - Answers - The costs required to make or buy a product,
including risk of obsolescence, taxes, insurance, and warehousing space used to store
the goods.
supply chain integration - Answers - Improves entire chain's performance
What kind of strategies help the bottom line in the long-term? - Answers - Relationship-
based strategies
Push (speculation) strategy - Answers - a company builds goods based on a sales
forecast, puts those goods into storage, and waits for customers to order the product
When is a push strategy used? - Answers - Maturity stage
, What are the pros of the push strategy? - Answers - Firms can achieve economies of
scale and can positively affect the customer service by shortening turnaround time
What are the cons of the push strategy? - Answers - -If sales forecast is wrong, may
result in too much/not enough product
-Expensive and time-consuming if retooling needed or demand changes
-Inventory carrying costs are expensive
Pull (responsive supply chain) strategy - Answers - customer orders drive
manufacturing and distribution operations
When is pull strategy used? - Answers - early in product life cycle
What are the pros of pull strategy? - Answers - -Eliminates risk of producing unwanted
products
-Products can be customized
-Minimal inventory carrying costs
-Rapid response to changing market conditions
What are the cons of pull strategy? - Answers - -Doesn't allow for economies of scale;
orders are small
-Difficult to achieve flexibility for production and distribution
Hybrid (push-pull) strategy - Answers - the initial stages of the supply chain operate on
a push system, but completion of the product is based on a pull system
What are the pros of the hybrid strategy? - Answers - -Combines economies of scale
with flexibility
-Produces more accurate sales forecasts
What are the cons of the hybrid strategy? - Answers - -May not be as cost competitive
as push system
-Firm incurs costs to store parts in inventory
What are 4 things to consider in a SCM strategy? - Answers - -Stability of demand
-Degree of cost competitiveness
-Degree of customization
-Speed at which customers need product
Logistics - Answers - the part of SCM that plans, implements, and controls the flow of
goods and services, and information between the point of origin and the final customer
What are the impacts of logistics on place? - Answers - deliver products and services to
the right location
