Chapter 5 COPY Flashcards
Hard Infrastructure Requirements
include the availability of suppliers, transportation services, communication, utilities, and warehousing facilities.
Soft Infrastructure requirements
include the availability of a skilled workforce, workforce turnover, and the community receptivity to business and industry.
A managers goal when locating facilities and allocating capacity should be to
maximize the overall profitability of the resulting supply chain network while providing customers with the appropriate responsiveness.
-A manager must consider many trade-offs during network design
Managers use network design models in two situations.
- decide on locations and capacities
2. assign current demand to facilities.
Duties that must be paid when products and/or equipment are moved across international, state, or city boundaries are referred to as
tariffs
If a country has very high tariffs,
companies either do not serve the local market or set up manufacturing plants within the country to save on duties.
Developing countries often create free trade zones where
duties and tariffs are relaxed as long as production is used primarily for export.
Building some over-capacity in the supply chain network and making the capacity flexible allows a firm to alter production flows within the supply chain to
produce more in facilities that have a lower cost based on current exchange rates.
Total logistics costs are a sum of the
inventory, transportation, and facility costs.
The facilities in a supply chain network must
at least equal the number that minimizes total logistics cost.
When faced with a network design decision, the goal of a manager is to design a network that
maximizes the firm’s profits while satisfying customer needs in terms of demand and responsiveness.
The objective of the first phase of network design is to
specify what capabilities the supply chain network must have to support a firm’s competitive strategy.
The objective of the second phase of network design is to
identify regions where facilities will be located, their potential roles, and their approximate capacity.
The objective of the third phase of network design is to
C) select a set of desirable sites within each region where facilities are to be located.
It is very important that long-term consequences be thought through when making facility decisions, because
facilities last a long time and have an enduring impact on a firm’s performance.
The implications of culture should not be glossed over because
tariffs and tax incentives should be carefully considered.
The quality of life at selected facility locations has a significant impact on performance because
it influences the work force available and their morale.
Capital, growth strategy, existing networks and global competition mostly affect which of the four Global Network Design Decisions?
Phase I - Supply Chain Strategy