Chapter-6 Discussion question-7

Nonfinancial uncertainties that a company should consider when making decisions on where to
source products are as follows:
Potential supplier:
How long have they been providing the product? Is it one of their primary lines of
business?
Do they have a track record of exiting/selling businesses?
Country or region of the prospective supplier:
Is it politically stable?
Overall trade agreement between the two countries
Is the governments policy regarding the products stable?
Sourcing a product is a strategic decision, so looking at the local economy, the people,
and the society in general is important.
Internal labor standards, employee safety and morale.
Supply chain/logistics:
Are there any risks of the most effective supply route being shut off?
The potential for natural disasters need to be accounted for. Hurricanes/cyclones can shut
down logistics in certain parts of the world for extended periods
Processes:
Process is extremely important. Are they able to swiftly make corrective actions? Do they
have competent, open minded people working for them?
What is their leadership like? Is the executive team able to trust the employees and
empower them to make quick decisions when something goes wrong?
What about technology? Do they have systems in place for tracking the progress of the
orders?
Happy, productive employees make good partners in the supply chain. As you grow, they can
grow as well.
Citations:
http://www.lexology.com/library/detail.aspx?g=e698d613-af77-4e34-b84e-940e14e94ce4
http://iveybusinessjournal.com/topics/strategy/the-benefits-and-risks-of-knowledge-processoutsourcing#.VMv8E53F_4A

Chapter 7-Discussion Question 1

Dell Supply chain Forecast:
In a build-to-order manufacturer like Dell, the manager needs to forecast what the customer
demand will be because they obtain the components in anticipation of the customer orders.
Forecasting may include the demand for next quarter which makes the supplier to provide with
the components required to assemble PC or computer. Collaborative forecasts such as plant and
equipment investment decisions, operating budgeting, promotions, inventory control, sales-force
allocation, work force planning should also be done by Dell. This data helps to increase the
responsiveness of the supply chain and reduce the delay in time, transportation costs.
The accuracy of dells forecast was between 70 to 75 percent due to its accurate account
selection. Whenever there is an uncertainty in the company, dell manager raises the forecast on
high-end products because it is way better and much easier to sell up and high-end had a more
extensive shelf live.
Citations:
http://www.ukessays.com/essays/commerce/technology-forecasting-and-strategic-planning-indell-commerce-essay.php
Chapter 7-Discussion Question 5
Forecasts are vital to every business organization and for every significant management decision.
A forecast is never perfect due to the dynamic nature of the external business environment.
Nothing interesting is ever perfectly predictable because there is always an element of randomness associated with it. Sometimes the randomness is large, and then the event is hard to predict.
A model that is good at explaining the past historical data is not necessarily good at predicting
the future. So manager should be suspicious if the forecaster claims there is no error. The goal of
the forecaster should be honest and realistic assessment and then use that information to make
better forecasting going forward. If really there is no error in forecast, then the forecaster should
head to Wall Street and play the stock or head to Vegas and play roulette. Therefore forecasting
isnt an exact science, but it should be considered as best guess at what really going to happen
in the future.
Citations:
http://blogs.sas.com/content/forecasting/2011/10/21/why-forecasts-are-wrong/
http://www.duettoresearch.com/blog/get-real-about-your-forecast-error/