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Chapter 9
Supply-Chain Strategy
OBJECTIVES
Supply-Chain Management Measuring Supply-Chain Performance Bullwhip Effect Outsourcing Value Density Mass Customization
Output
Suppliers
Manufacturing
Distribution
Customers
Average aggregate inventory value 52 weeks Weeks o supply ! ost o goods sold
The McGraw-Hill Companies, Inc., 2004
Bullwhip Effect
The magnification of variability in orders in the supplychain
Retailers Orders Wholesalers Orders Manufacturers Orders
Time
Time
Time
10
11
Supply
Uncertainty
12
13
Reasons to Outsource
Organizationally-driven Improvement-driven Financially-driven Revenue-driven Cost-driven Employee-driven
14
15
16
End of Chapter 9