erp ch 13 book

the bullwhip effect

phenomenon of variability magnification as we move from the customer to the producer in the supply chain

– A slight change in consumer sales ripples backward as magnified oscillations upstream, like the result of a flick of a bullwhip handle

– Forward buying, the practice of “stocking up” on products due to temporary price reductions, makes this variability even worse

Stable and functional - SC uncertainty Framework

Efficient supply chain
Grocery, basic apparel, food, oil and gass

stable and innovative - SC uncertainty Framework

Responsive supply chain
fashion apparel, low-end computers, seasonal products

evolving and functional - SC uncertainty Framework

risk-hedging supply chain
hydroelectric power, food dependent on weather

evolving and innovative - SC uncertainty Framework

agile supply chain
cell phones, high-end computers, semiconductors

Functional Products

Functional products include the staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations

Innovative Products

Many companies introduce innovations to incentivize customers to buy

Total Cost of ownership - def+it uses what?

an estimate of the cost of an item that includes all the costs related to the

procurement and use of an item, including any related costs in disposing of the item

acquisition costs
ownership costs
power ownership costs