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    Umar Gondal
    Trade promotions and price fluctuations make supply chain coordination difficult by creating demand spikes that exceed capacity. Everyday low pricing and volume-based quantity discounts can help mitigate this by allowing for steadier production and logistics. Cooperation and trust within a supply chain improve performance by facilitating win-win situations, making coordination easier, increasing productivity, and allowing information sharing between stages. When designing supply chain relationships, issues to consider include assessing the value each party provides, defining operational roles and decision rights, creating contracts that allow for negotiation of contingencies, and establishing conflict resolution mechanisms. This helps relationships be equitable and interdependent, promoting trust and cooperation.

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    Assignment

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    Umar Gondal
    45 views2 pages
    Trade promotions and price fluctuations make supply chain coordination difficult by creating demand spikes that exceed capacity. Everyday low pricing and volume-based quantity discounts can help mitigate this by allowing for steadier production and logistics. Cooperation and trust within a supply chain improve performance by facilitating win-win situations, making coordination easier, increasing productivity, and allowing information sharing between stages. When designing supply chain relationships, issues to consider include assessing the value each party provides, defining operational roles and decision rights, creating contracts that allow for negotiation of contingencies, and establishing conflict resolution mechanisms. This helps relationships be equitable and interdependent, promoting trust and cooperation.

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    Trade promotions and price fluctuations make supply chain coordination difficult by creating demand spikes that exceed capacity. Everyday low pricing and volume-based quantity discounts can help mitigate this by allowing for steadier production and logistics. Cooperation and trust within a supply chain improve performance by facilitating win-win situations, making coordination easier, increasing productivity, and allowing information sharing between stages. When designing supply chain relationships, issues to consider include assessing the value each party provides, defining operational roles and decision rights, creating contracts that allow for negotiation of contingencies, and establishing conflict resolution mechanisms. This helps relationships be equitable and interdependent, promoting trust and cooperation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    45 views2 pages

    Assignment

    Uploaded by

    Umar Gondal
    Trade promotions and price fluctuations make supply chain coordination difficult by creating demand spikes that exceed capacity. Everyday low pricing and volume-based quantity discounts can help mitigate this by allowing for steadier production and logistics. Cooperation and trust within a supply chain improve performance by facilitating win-win situations, making coordination easier, increasing productivity, and allowing information sharing between stages. When designing supply chain relationships, issues to consider include assessing the value each party provides, defining operational roles and decision rights, creating contracts that allow for negotiation of contingencies, and establishing conflict resolution mechanisms. This helps relationships be equitable and interdependent, promoting trust and cooperation.

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    of 2

    Supply Chain Management

    Assignment 11
    Umar Farooq 17U00609

    Q1. How do trade promotions and price fluctuations affect coordination in a supply chain?
    What pricing and promotion policies can facilitate coordination?

    Ans. Trade promotions and price fluctuations make supply chain coordination more difficult.
    Customers seek to purchase goods for less and engage in forward buying which creates spikes in
    demand that may exceed capacity. All parties would benefit if the supply chain used everyday
    low pricing (EDLP) to mitigate forward buying and allow procurement, production, and logistics
    to function at a steadier pace. If price incentives must be offered, the chain is better served by
    implementing a volume-based quantity discount plan instead of a lot size-based quantity
    discount, i.e., providing incentives to purchase large quantities over a long period of time,
    perhaps a year.

    Q2. How is the building of strategic partnerships and trust valuable within a supply chain?

    Ans. Cooperation and trust within the supply chain help improve performance for the following
    reasons:

     When stages trust each other, they are more likely to take the other party’s objectives into
    consideration when making decisions, thereby facilitating win-win situations.
     Action-oriented managerial levers to achieve coordination become easier to implement
    and the supply chain becomes more agile.
     An increase in supply chain productivity results, either by elimination of duplicated effort
    or by allocating effort to the appropriate stage.
     Detailed sales and production information is shared; this allows the supply chain to
    coordinate production and distribution decisions.
    Q3. What issues must be considered when designing a supply chain relationship to improve
    the chances of developing cooperation and trust?

    Ans. The issues that supply chain partners must consider when designing their chain include
    assessing the value of the relationship, the operational roles and decision rights for each, the
    execution of binding contracts, and establishment of conflict resolution mechanisms.
    The value of the relationship is assessed by identifying the mutual benefits that it provides and
    the costs and contributions of each party. The mix of effort and benefit for all parties should be
    equitable.
    The roles and decision rights take into account the interdependence between the parties; the
    nirvana of interdependence is reciprocal interdependence, where parties come together and
    exchange information and inputs in both directions. This requires more effort than sequential
    interdependence but the payoff is increased supply chain surplus.
    Managers can help promote trust by creating contracts that encourage negotiation as unplanned
    contingencies arise since complete information and consideration of all future contingencies is
    impossible. The primary contacts from each side are an important starting point in developing a
    healthy relationship.
    Effective contract-resolution mechanisms can significantly strengthen any supply chain
    relationship. Such mechanisms allow parties the opportunity to communicate and work through
    their differences, in the process building greater trust.

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