Supply Chain Management Chapter 6 Quiz: The Customer's Customer is Upstream

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Questions and Answers

What is the primary focus of downstream supply chain management?

Managing relationships with suppliers

Transforming raw materials into finished products

Delivering products to customers (correct)

Procuring raw materials

What is the main characteristic of a push-based model in Supply Chain Management?

It is triggered by customer orders

It is based on best guesses of demand (correct)

It uses web-based systems

It focuses on managing relationships with suppliers

What is the term for the network of organizations and business processes involved in procuring raw materials, transforming them into products, and distributing them to customers?

Downstream Supply Chain

Upstream Supply Chain

Supply Chain (correct)

Enterprise Applications

What triggers events in the supply chain in a pull-based model?

Customer orders Signup and view all the answers

What is the term for a firm's suppliers and their suppliers, as well as the processes for managing relationships with them?

Upstream Supply Chain Signup and view all the answers

What is the primary goal of just-in-time strategy in supply chain management?

To receive components as they are needed Signup and view all the answers

What is the bullwhip effect in supply chain management?

A phenomenon where information about product demand gets distorted across the supply chain Signup and view all the answers

What is the primary characteristic of digital goods?

Cost of producing first unit is almost entire cost of product Signup and view all the answers

What is the primary function of supply chain planning systems?

To model existing supply chain and enable demand planning Signup and view all the answers

What is an example of internet-enabled technology used in B2B?

Electronic data interchange (EDI) Signup and view all the answers

What is the primary goal of e-commerce presence map?

To identify four areas of e-commerce presence Signup and view all the answers

What is the primary characteristic of subscription-based revenue model?

Charging a subscription fee for access to some or all of its offerings Signup and view all the answers

What is the primary advantage of e-commerce over traditional commerce?

Reduced transaction costs Signup and view all the answers

What is the primary goal of internal supply chain management?

To transform materials, components, and services into finished products Signup and view all the answers

What is the primary characteristic of affiliate-based revenue model?

Sending visitors to other websites in return for a referral fee Signup and view all the answers

Study Notes

Supply Chain Management

Downstream supply chain refers to the organizations and processes responsible for delivering products to customers
Upstream supply chain refers to a firm's suppliers, suppliers' suppliers, and the processes for managing relationships with them

Push-Based and Pull-Based Model

Push-based model (build-to-stock) is an earlier SCM system that schedules production based on best guesses of demand
Pull-based model (demand-driven) is a web-based system where customer orders trigger events in the supply chain

Supply Chain Management

Supply chain is a network of organizations and business processes for procuring raw materials, transforming them into intermediate and finished products, and distributing the finished products to customers
Inefficiencies in supply chain management can waste up to 25% of operating expenses
Just-in-time strategy involves receiving components as they are needed and shipping finished goods immediately after leaving the assembly line
Safety stock is a buffer for lack of flexibility in the supply chain
Bullwhip effect occurs when information about product demand gets distorted as it passes from one entity to the next across the supply chain

Supply Chain Management Software

Supply chain planning systems model existing supply chains, enable demand planning, optimize sourcing and manufacturing plans, establish inventory levels, and identify transportation modes
Supply chain execution systems manage the flow of products through distribution centers and warehouses

Internal Supply Chain

Internal supply chain is used for transforming materials, components, and services into finished products or intermediate products for customers and managing materials and inventory

Digital Goods

Digital goods are goods that can be delivered over a digital network
The cost of producing the first unit is almost the entire cost of the product
Costs of delivery over the Internet are very low, but marketing costs remain the same
Pricing is highly variable in digital goods industries
Industries with digital goods are undergoing revolutionary changes (e.g., publishers, record labels)

Internet-Enabled Technologies Used in B2B

Electronic data interchange (EDI) enables computer-to-computer exchange of standard transactions such as invoices and purchase orders
Private industrial networks (private exchanges) are secure websites used by large firms to link to suppliers and partners
Net marketplaces (e-hubs) are single digital marketplaces for many buyers and sellers
Exchanges are independently owned third-party Net marketplaces for spot purchasing

E-Commerce Presence Map

The e-commerce presence map consists of four areas: websites, e-mail, social media, and offline media

Type of E-Commerce Revenue Model

Advertising generates revenue by attracting a large audience of visitors who can be exposed to advertisements
Sales involve companies deriving revenue by selling goods, information, or services to customers
Subscription involves offering content or services and charging a subscription fee for access to some or all of the offerings
Free/Freemium involves offering basic services or content for free and charging a premium for advanced or special features
Transaction fee involves receiving a fee for enabling or executing a transaction
Affiliate involves websites sending visitors to other websites in return for a referral fee or percentage of the revenue from any resulting sales

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Description

Review key concepts in chapter 6 of information management, including achieving operational excellence and customer intimacy, enterprise applications, and supply chain management models. Understand the differences between downstream and upstream supply chains, and push-based and pull-based models.