Distribution Network Design in Supply Chain Management Quiz

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20 Questions

What are the two dimensions used to evaluate distribution network performance?

Value provided to the customer and cost of meeting customer needs

Which of the following is NOT an element of customer service influenced by network structure?

Facilities management

What determines the profitability of a delivery network?

Revenue from met customer needs and network costs

What are the factors affecting distribution network design evaluated along?

Value provided to the customer and cost of meeting customer needs

Which of the following is NOT an element that affects supply chain costs as per the text?

Product variety

Which decision is NOT mentioned as a key decision in distribution network choices from the manufacturer to the end consumer?

Location of production facilities

What does distribution in a supply chain directly affect, according to the text?

Both supply chain cost and customer value

What drives profitability in a supply chain according to the text?

Directly affecting supply chain cost and customer value

Which of the following is NOT an element influenced by network structure as per the text?

Supplier stage management

What are the two key decisions mentioned in distribution network choices from the manufacturer to the end consumer?

Number of warehouses and type of transportation

In the context of the distribution network design options, which design involves the manufacturer directly shipping the product to the customer?

Distributor storage with last-mile delivery

Based on performance characteristics, which design option is likely to have a long response time of one to two weeks for order processing?

Distributor storage with carrier delivery

Which distribution network design option is associated with lower transportation costs due to increased distance and disaggregate shipping?

Manufacturer storage with direct shipping

Which design option is characterized by significant investment in information infrastructure to integrate the manufacturer and retailer?

Manufacturer storage with direct shipping and in-transit merge

Which design option is likely to complicate receiving due to varying response times by product?

Manufacturer storage with direct shipping and in-transit merge

Which design option makes it easy to provide a high level of variety in products?

Manufacturer storage with direct shipping

Which distribution network design offers good home delivery but may suffer if orders from several manufacturers are sent as partial shipments?

Manufacturer/distributor storage with customer pickup

Which design option allows fast time to market, making the product available as soon as the first unit is produced?

Manufacturer storage with direct shipping and in-transit merge

In the context of distribution network design, which option is likely to have lower facility costs due to aggregation?

Manufacturer storage with direct shipping

Which design option makes it difficult but important from a customer service perspective to have order visibility?

Manufacturer storage with direct shipping and in-transit merge

Study Notes

Distribution Network Performance Evaluation

  • Distribution network performance is evaluated based on two dimensions: responsiveness and efficiency.

Elements of Customer Service

  • Elements of customer service influenced by network structure include order visibility, response time, and product variety.

Profitability Determinants

  • The profitability of a delivery network is determined by the trade-off between responsiveness and efficiency.

Factors Affecting Distribution Network Design

  • Factors affecting distribution network design are evaluated along the dimensions of responsiveness and efficiency.

Elements Affecting Supply Chain Costs

  • Elements that affect supply chain costs include inventory, transportation, and facility costs.

Key Decisions in Distribution Network Choices

  • Two key decisions in distribution network choices from the manufacturer to the end consumer are the number of warehouses and the mode of transportation.

Distribution Network Design Options

  • There are several distribution network design options, including:
    • Direct shipping: the manufacturer directly ships the product to the customer.
    • Indirect shipping: the manufacturer ships to a retailer, who then ships to the customer.
    • Hybrid shipping: a combination of direct and indirect shipping.
  • The direct shipping design option is associated with lower transportation costs due to increased distance and disaggregate shipping.
  • The indirect shipping design option is characterized by significant investment in information infrastructure to integrate the manufacturer and retailer.
  • The hybrid shipping design option is likely to complicate receiving due to varying response times by product.
  • The direct shipping design option makes it easy to provide a high level of variety in products.
  • The hybrid shipping design option offers good home delivery but may suffer if orders from several manufacturers are sent as partial shipments.
  • The indirect shipping design option allows fast time to market, making the product available as soon as the first unit is produced.
  • The direct shipping design option is likely to have lower facility costs due to aggregation.
  • The indirect shipping design option makes it difficult but important from a customer service perspective to have order visibility.

Distribution Network Design and Customer Service

  • Distribution in a supply chain directly affects customer service, including order visibility, response time, and product variety.
  • Network structure influences customer service, including order visibility, response time, and product variety.
  • Profitability in a supply chain is driven by the ability to balance responsiveness and efficiency.

Test your knowledge of distribution network design and transportation in the supply chain with this quiz. Explore the steps involved in moving and storing products from supplier to customer stages, and their impact on supply chain cost and customer value.

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