2 - Distribution and Demand Management

Question 2

Why are customers becoming more demanding?

Answer 2

Higher budget, higher market competition, higher market transparency in terms of communication and information exchange, and reinforcement by psychological effects

Question 3

How is customer value perceived?

Answer 3

utility of consumption / product price + product cost. Utility lies in satisfaction, quality, convenience, fast deliver, social benefits. Price and cost lies in support, saved time, relief from disposal.

Question 4

What are the components of customer service?

Answer 4

Pre-Transaction, Transaction, and Post-Transaction

Question 5

What can be addressed in the pre-transaction phase?

Answer 5

Written customer service policy, accessibility, organisation structure, system flexibility

Question 6

What can be addressed in the transaction phase?

Answer 6

Order cycle time, inventory availability, order fill rate, order status information

Question 7

What can be addressed in the post-transaction phase?

Answer 7

availability of spares, call-out time, product tracing/warranty, customer complaints, claims, etc.

Question 8

What are the advantages of a centralized distribution center?

Answer 8

Higher selection of products, which can be produced per customer order (build to order), Higher product availability, overall the lowest possible costs for inventories, plants, and handling

Question 9

What are the advantages of a decentralized distribution center?

Answer 9

Shorter delivery times, facilitated product returns at the retailers site, lower transport costs