Distribution and Supply Chain Networks Quiz

Role of Distribution in the Supply Chain

• Distribution facilitates the movement of goods from producers to consumers, ensuring timely delivery.
• Effective distribution enhances customer satisfaction and loyalty, impacting overall sales.

Impact of Distribution on Profitability

• Efficient distribution reduces shipping costs and improves delivery speed, directly contributing to higher profit margins.
• Poor distribution decisions can lead to delays, increased costs, and dissatisfied customers, negatively affecting profitability.

Factors Influencing Distribution Network Design

• Customer demand patterns drive decisions on warehouse locations and inventory levels.
• Transportation costs, service levels, and lead times must be evaluated when designing distribution networks.

Evaluating Distribution Network Performance

• Key performance indicators include order accuracy, delivery speed, inventory turnover, and customer satisfaction.
• Regular assessment helps identify inefficiencies and areas for improvement.

Purpose of Transportation Network Design and Operations

• The primary goal is to optimize the flow of goods, balancing cost and service quality.
• Effective transportation design reduces lead times and improves customer service.

Key Role of Distribution in Achieving Supply Chain Objectives

• Distribution aligns logistical activities with business goals, improving efficiency and effectiveness in meeting market demands.

Key Decisions in Designing a Distribution Network

• The two crucial decisions involve determining the number of distribution centers and their locations.
• Considerations include the trade-off between centralization and decentralization of inventory.

Manufacturer Storage with Direct Shipping

• This option allows for products to be shipped directly from the manufacturer to the customer, reducing storage needs.
• It often leads to faster delivery times but requires robust transportation capabilities.

Trade-offs in Distribution Network Structure

• One trade-off involves balancing inventory costs against transportation costs; high inventory levels reduce stockouts but increase holding costs.

Influence of Network Structure

• Network structure affects delivery speed and reliability, impacting overall customer service levels.

Benefit of Aggregation for Low-Demand, High-Value Items

• Aggregation helps optimize inventory levels, reducing excess stock while ensuring availability, which is vital for high-value items.

Distributor Storage with Carrier Delivery

• This design option involves storing goods at distribution centers with transportation provided by third-party carriers to reach customers.

Factors Influencing Supply Chain Costs

• Inventory holding costs, transportation expenses, and warehousing costs significantly shape overall supply chain expenses.

Significant Investment for Manufacturer Storage with Direct Shipping

• High investment in transportation infrastructure is necessary to support direct shipping from manufacturers, ensuring service quality.

Impact of Increased Distance on Response Time

• Greater distances and a two-stage order processing system result in longer response times, potentially affecting customer satisfaction.

Amazon's High Variety Offering

• Amazon boasts a diverse range of products, enhancing its competitive edge and appealing to a broader customer base.

Test your knowledge of key design factors, distribution options, and the design of optimal distribution networks in supply chain management. Explore the role of distribution in the supply chain and learn about the steps involved in moving and storing products from the supplier stage to the customer stage.