Case Study #3: A Pain in the (Supply) Chain
This case is about the bullwhip effect and supply chain coordination
Read “A pain in the (supply) chain” in the course pack and the supply chain integration (bullwhip effect) chapter in the textbook.
To meet the target of 9% sales growth, Exceso Corporation (the manufacturer) starts an aggressive promotion (sharp discount in the price) to its retailers, despite the obvious downside of doing so. Please read the case carefully and answer the following questions:
Does Exceso suffer from the bullwhip effect? What do you think are potential reasons? Hint: Describe the symptom at Exceso, and comment on the four potential reasons for bullwhip effect.
Is the supply chain performance hurt by the promotion? What are potential reasons? Hint: Comment on the performance of the manufacturer and of the retailer (e.g. any loss of sales due to the promotion). Is the supply chain coordinated to achieve its maximum performance? Do the manufacturer and the retailer have conflicting interests? What can they do to build trust and align their objectives? Should Exceso maintain its aggressive promotion strategy? What’s your recommendation to Exceso?
Hint: Feel free to pick a side. Defend your answer briefly with two or three reasons.
Write a report that summarizes your answers, following these write-up guidelines:
Submit your individual answer as a word document through Blackboard assignments section.
Answer the questions concisely. Limit your answer to be within 1 page. You might choose to revise and resubmit the report after class discussion to improve your grade.
The only material you can refer to when writing this report is the assigned case reading supplemented by the textbook. Using any material that is available from other students, the Internet, etc. without the instructor’s permission is considered plagiarism, which is against university code of...
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