Lec. 2: Relationships

Question 1

What are some arguments in the discussion of make or buy?

Answer 1

Learning curve:
Let the firm with the highest output produce

Competence based view:
If this is your core competence: make
If this is a peripheral competence: buy

Question 2

What is business relations?

Answer 2

“The connections that exists between entities involved in the business process.”

Question 3

What is the difference between a Single company focus and Supply Chain Awareness

Answer 3

Focusing on just your own company, or seeing the entire supply chain as a coherent whole.

Question 4

What is the key development in relationships?

Answer 4

From “dicky bow” to “rhombus”. From transaction only to focus on relationship. From sales/purchasing departments only, to engagement on several levels.

Question 5

What are 3 reasons why developing partnerships should be avoided:

Answer 5

• Development takes time
• Development is costly
• Development includes risk

Question 6

What should determines the integration of a relationships?

Answer 6

The main determinant should be Strategic Importance.

Question 7

Reasons for outsourcing:

Answer 7

• Cost reductions (lean)
• Flexibility (agile)
• Strategic focus on core competency
• Get the newest technology

Question 8

Reasons for offshoring:

Answer 8

• Lower costs in offshore regions
• Less stringent regulatory controls in offshore regions
• Deregulation of trade facilitates offshoring
• Lower communication and IT costs
• Improving capabilities in many offshore regions
• Clusters of specific acitivities emerging in certain regions.

Question 9

What are the stages of an outsourcer and outsource relationship?

Answer 9

• Master-slave
• Consultative stage
• Peer-to-peer
• Competitive stage

Question 10

How can supply chains integrate?

Answer 10

Internal, forward, backwards and forward and backwards

Question 11

What is the bullwhip effect?

Answer 11

Amplification of demand variations from downstream to upstream.

Question 12

What are causes of the bullwhip effect?

Answer 12

- Demand forecast updating
		○ Each link overestimates variations in demand as regular changes. 
- Order batching
- Price fluctuations
- Rationing

Question 13

What is the Hockey Stick effect:

Answer 13

Increasing sales at the end of reporting period.

Question 14

What is Channel stuffing?

Answer 14

Inflating sales figure, but pushing more products into a sales channel than it is able to sell.

Question 15

What is The ugly tradeoff?

Answer 15

A tradeoff between lost sales and increased holding costs?

Question 16

What is the difference between customer orders and consumer sales?

Answer 16

You make money in customer orders, but you need consumer sales to sustain your business.

Question 17

What is outsourcing?

Answer 17

Outsourcing refers to the transfer of control of a certain process to another firm, rather than doing it in house

Question 18

What are the 2 types of outsourcing?

Answer 18

• Partial

- Turnkey