your company maufacture fuel pumps used by automotive manufactures, for which th

Question

your company maufacture fuel pumps used by automotive manufactures, for which the demand is very predictable. You buy your componets from a known group of vendors who have been manufacturing them for years and whose manufacturing processes are very stable.

a) which of the below would you focus on as the most important issue as you optimize your supply chain? ( )

a reponsiveness- being able to respond to sudden changes in demand

b. risk hedging-pooling and sharing resources in the supply chain

c. efficiency - producing at the lowest possible cost

b) why?

Explanation / Answer

As per my opinion most important issue in the supply chain answer is “C”, Efficiency - producing at the lowest possible cost.

Because here demand very predictable, we don’t know about the demand. So we have to optimize the cost to supply product, if demand will be low than sales volume can adjust cost by deduce or low cost per unit.   

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