SCM Assignment 1

1. i)

North Dealer
Goods Ordered
283
267
258
392
308
1508

Sale
300
75
800
50
500
1725

Difference
17
-192
542
-342
192
217

Mod of Difference
17
192
542
342
192
1285

% Accuracy = (1-(1285/1725))*100= 26%

South Dealer
Goods Ordered
333
433
367
267
133
1533

Sale
500
100
200
100
150
1050

Difference
-167
333
167
167
-17
483

Mod of Difference
167
333
167
167
17
851

% Accuracy = (1-(851/1050))*100= 18.96%

This difference could be because of

Two month moving average forecasting not a correct method to forecast

Demand fluctuation due to some market condition

1. (ii)
Tracking signal can be used to identify if over ordering is done or under ordering

TS of North Zone Dealer: Using the above table

RSFE = 217

MAD = 257

TS = 217/257 = 0.84

Therefore, North Zone dealer is biased towards over-ordering!

TS of South Zone Dealer: RSFE = -483

MAD = 170

TS = -483/170 = -2.83

Therefore, South Zone dealer is biased towards under ordering!

1. (iii)
Aggregate Forecasting is better in this case as one dealer is over-ordering and the other dealer is under-ordering.
Goods Ordered
616
700

Sale
800
175

Difference
184
-525

Mod of Difference
184
525

625
659
441
3041

1000
150
650
2775

375
-509
209
-266

375
509
209
1802

The above table is obtained by adding the previous two tables of North Zone dealer and South Zone dealer
respectively. Now, here the % Accuracy stands at 35% which is better than both dealers individual % Accuracy.
1. (iv) Aggregate forecasting for different values of :

Month Sales Forecast(=0.1) Forecast(=0.2) Forecast(=0.5) Forecast(=0.7) Forecast(=0.9)

1
250
250
250
250
250
250
2
700
250
250
250
250
250
3
900
290
340
475
565
655
4
800
351
452
687.5
799.5
875.5
5
175
395.9
521.6
743.75
799.85
807.55
6
1000
374.21
452.28
459.37
362.45
238.25
7
150
499.37
561.82
729.69
808.74
923.82
8
650
464.43
479.46
439.84
347.62
227.38
Total Sales = 2775
Total
Absolute
Deviation
Error %

For(=0.1)

For(=0.2)

For(=0.5)

For(=0.7)

For(=0.9)

2890.63

2834.68

2886.71

3009.01

3361.24

104.16

102.15

104.02

108.43

121.12

For all the assumed values of , =0.2 is the comparatively better assumption. But even for this value
error % is huge.

2. (i)
Development chain
Plan/Design->Source->Produce
Supply chain
Supply->Produce->Distribute->Sell
They both intersect at produce phase.
The development chain is a set of activities associated with introduction of a new product into the market. It consists
of product design phase, make or buy decision making, supplier selection, strategic partnerships, supply contracts and
production plans.
The supply chain, on the other hand, consists of the activities and processes that need to be in place to ensure the
supply of the product at the right place, at the right time and in the right quantity.
2. (ii)
The Council of Supply Chain Management Professionals glossary, defines both 3PL and 4PL, and is one I have found
to be generally true across the board. The CSCMP defines 3PL as follows:
Outsourcing all or much of a companys logistics operations to a specialized company. The term 3PL was first used
in the early 1970s to identify intermodal marketing companies (IMCs) in transportation contracts. Up to that point,
contracts for transportation had featured only two parties, the shipper and the carrier. When IMCs entered the
pictureas intermediaries that accepted shipments from the shippers and tendered them to the rail carriersthey
became the third party to the contract, the 3PL. Definition has broadened to the point where these days, every

company that offers some kind of logistics service for hire calls itself a 3PL. Preferably, these services are integrated,
or bundled, together by the provider. Services they provide are transportation, warehousing, cross-docking,
inventory management, packaging, and freight forwarding. In 2008 legislation passed declaring that the legal
definition of a 3PL is A person who solely receives, holds, or otherwise transports a consumer product in the ordinary
course of business but who does not take title to the product.
Third-party logistics providers are:
Freight forwarders
Courier companies
Other companies integrating & offering subcontracted logistics and transportation services
The CSCMP defines 4PL as follows:
Differs from third party logistics in the following ways; 1)4PL organization is often a separate entity established as a
joint venture or long-term contract between a primary client and one or more partners; 2)4PL organization acts as a
single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the clients
supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to
form a 4PL organization within its existing structure.
However, 4PL was originally defined by Accenture as a trademark in 1996 and defined as A supply chain integrator
that assembles and manages the resources, capabilities, and technology of its own organization with those of
complementary service providers to deliver a comprehensive supply chain solution., but is no longer registered.
4PLs have also been referred to as Lead Logistics Providers. Now a new crop of companies have emerged who are
actual transportation companies too. While a 4PL is sometimes described as non-asset-owning service provider, their
role is to provide broader scope managing of the entire supply chain.
2.(iii)
Postponement, or delayed product differentiation, is an example of push-pull strategy. In this strategy, the organization
designs the product and the manufacturing process in such a way that the decisions about the specific product that is to
be manufactured is delayed as long as possible. The manufacturing process starts by creating a generic product, which
is later differentiated to a specific product only once the demand is revealed.