1. Identify the key factors to be considered when designing the distribution network.

Ans: Performance of a distribution network should be evaluated along two dimensions at the
highest level, one is customer needs that are met, and another one is the cost of meeting customer
needs. Thus, a firm must evaluate the impact on customer service and cost as it compares different
distribution network options. The customer needs that are met influence the company's revenues,
which along with cost decide the profitability of the delivery network that are influenced by the
structure of the distribution network. These include: 1) Response time - is the time between when
a customer places an order and receives delivery. 2) Product variety - is the number of different
products/configurations that a customer desires from the distribution network. 3) Product
availability - is the probability of having a product in stockwhen a customer order arrives. 4)
Customer experience - includes the ease with which thecustomer can place and receive their
order. It also includes purely experiential aspects suchas the possibility of getting a cup of coffee
and the value that the sales staff provides. 5) Order visibility - is the ability of the customer to track
their order from placement to delivery. 6)Returnability - is the ease with which a customer can
return unsatisfactory merchandise andthe ability of the network to handle such returns.
2. Discuss the strengths and weaknesses of various distribution options.
Ans:

Manufacturer storage with direct shippings advantages is it is able to centralize inventories at the
manufacturer. And its weaknesses are the ownership structure of the inventories at the
manufacturer. Manufacturer storage with direct shipping and in-transitmerges advantages is
lower transportation cost and improves customer experience. Its weaknesses is additional effort
during the merge itself. Distributor storage with package carrier deliverys advantages is fast
response tine and improves customer experience weaknesses is high Inventory & facilities and
handling cost. Distributor storage with last mile deliverys advantages is quick response tine and
good customer experience, and its weaknesses is the cost is high. Manufacturer/distributor storage
with costumer pickupsAdvantages is lower the delivery cost and its weaknesses is increased
handling cost at the pickup site. Retail storage with customer pickups advantages is lower the
delivery cost &provides a faster response than other networks, its weaknesses is increased
inventory cost and facility costs.
3. Explain the role that distributors play in the supply chain.
Ans: Distributors added value to a supply chain between a supply stage and a customer stage