ASSIGNMENT SET-1

Q1. a) Describe the various activities involved in the selling process.

Ans. The various activities involved in the selling process are as mention below

 Activities in the Selling Process:-

The selling process is a set of activities undertaken to successfully obtain an order and being
building long-term customer relations.
The selling activities undertaken by professional salespeople include:
1. Generating Sales Leads
2. Qualifying Leads
3. Preparation for the sales Call
4. The Sales Meeting
5. handling Buyer Resistance
6. Closing the Sale
7. Account Maintenance
1) Generating Sales Leads

Selling begins by locating potential customers. A potential customers or “prospect” is first identified
as a “sales lead”, which simply means the salesperson has obtained information to suggest that someone
exhibits key characteristics that lend them to being a prospect.
For salesperson actively involved in generating leads, they are continuously on the lookout for potential
new business. In fact, for salesperson whose chief role is that of order getter, there is virtually no chance
of being successful unless they can consistently generate sales leads.

Sales lead can come from many sources including:

i) Prospect Initiated: includes leads obtain when prospects initiate contact such as- when they
fill out a web site form, enter a trade show booth or respond to an advertisement.
ii) Profile Fitting: Usages market research tools, such as company profiles, to locate leads
based on customers that fit a particular profile likely to be a match for the company’s
products. The profile is often based on the profile previous customers
iii) Market Monitoring: Through this approach leads are obtain by monitoring media outlets,
such as news articles, internet forums and corporate press releases.
iv) Canvassing: Here leads are gathered by cold-calling (ie contacting someone without pre-
notification) including in- person, by telephone or e-mail.
v) Data Mining: This technique uses sophisticated software to evaluate information (ex in a
corporate database) previously gathered by a company in hopes of locating prospects.
vi) Personal and Professional Contacts: A very common method for locating sales leads uses
references. Such reference may come at no cost to salespersons or, to encourage references,
salespeople may offer payment for references. Non-paying methods including asking
acquaintances (ex, friends, business associates) and networking (ex, joining local or
professional groups and associations). Paid methods may include payment to others who
direct leads that eventually turn into customers including using internet affiliate programs.
vii) Promotion: The Method uses free gifts to encourage prospect to provide contact information
or attend a sales meeting. For example, offering free software for singing up for a
demonstration of another product.

2) Qualifying Sales Leads :-

Not all sales leads holding potential for becoming sales prospects. There are many reasons
for this including:

i) Cannot be Contacted: Some prospects may fit the criteria for being a prospect but
gaining time to meet with them may be very difficult( ex, High-level executives).
ii) Need Already Satisfied: Prospects may have already purchased a similar product
offered by a competitor and, thus, may not have need for additional products.
iii) Lack Financial Capacity: Just because someone has a need for a product doesn’t mean
they can afford it. Lack of financial capacity is major reason why sales leads do not
become prospects.
iv) May Not Be Key Decision Maker: Prospects may lack the authority to approve the
purchase.
v) May Not Meet Requirements to Purchase: Prospects may not meet the requirements
for purchasing the product (ex, lack other products needed for seller’s product to work
 properly). The process of determining whether a sales lead has the potential to become a
prospect is known as “qualifying” the lead. In some cases, a sales lead can be qualified
by the seller prior to making first contact. For instance, this can be done through the use
of research repots, such as an evaluation of company’s financial position using publicly
available financial reporting services.

3) Preparation For the Sales Call:

A salesperson’s next task is to prepare for an eventual sales call this activity in the selling
process has two main objectives:

1) Learn More About the Customer – While during the lead generation and qualifying
portion of the selling process a seller may have gained a great deal of knowledge
about a customer, invariably there is much more to be known that will be helpful once an
actual sales call is made. The salesperson will use their research skill to learn about
issue as:

i) Who is the key decision maker?

ii) What is the customer’s organizational structure?
iii) What products are currently being purchased?
iv) How are purchase decision made?

Salesperson can attempt to gather this information through several sources including: corporate
research report, information on the prospect’s website, conversation with non-competitive
salespeople who have dealt with the prospect, and by asking question when setting up sales
meeting. Gaining this information can help prepare the salesperson for the sales presentation.
Having more information about a prospect allow the salesperson to be more confident in his/her
presentation and, consequently, come across as more knowledgeable when meting with the
prospect.

a) Arranging Prospect Contact- With some information about the prospect in-hand, the
salesperson must then move to make initial contact. In a few cases a salesperson may be fortunate
to have the prospect contact her/him but in most cases salesperson will need to initiate contact. In
many ways arranging for contact is as much as selling a product.

There are two main approaches to arranging contact:

i) Cold Calling for Presentation- A challenging way to contact a prospect is to conduct a
sales meeting through a straight cold call. In this approach the intention is to only contact the
prospect but to also give a sales presentation during this contact period. This approach can be
difficult since the prospect may be irritated by having unannounced salespeople interrupt them
and take time out of their busy work schedule to sit for a sales meeting.

ii) Cold Calling For Appointment – A better approach for most salespeople is to contact a
prospect to set up an appointment in advance of the sales meeting. The main advantage of
making appointment is that it gives the salesperson additional time to prepare for the meeting
and also, in the course of discussing an appointment, the salesperson may have the opportunity
to gain more information from the prospect. This way also has the added advantage of having
the prospect agree to sit for the meeting, which may make them more receptive to the product
than if the salesperson had followed the Cold Calling for presentation approach.
4) The Sales Meeting:
The heart of the selling process is the meeting that takes place between the prospect and the
salesperson. At this stage of selling process the salesperson will spend a considerable amount of
time presenting the product.
Additionally, the meeting is not just about the seller discussing the product, rather much more
takes place during this part of the selling process including:

Establishing Rapport with the Prospect- Successful salespeople know that jumping right into a
discussion of their product is not the best way to build relationships. Often it is important that,
upon first greeting the prospect, the salesperson spends a short period of time in a friendly
conversation to help establish a rapport with the potential buyer.

Gaining Background Information- The salesperson will use questioning skill to learn about the
prospect and the prospect’s company and industry.

Access Prospect’s Needs- Taking what is learned from the prospect’s response to questions the
salesperson can determine the prospect needs. To accomplish this task successfully, sellers must
be skilled at listening and understanding responses.

Presenting the Product- The salesperson will stimulate a prospect’s interest by discussing a
product’ features and benefits in a way that is tailored to the need of the customer. Part of this
discussion may include a demonstration of the product.

Assess the Prospect- Throughtout the persentaion the seller will use techniques, including
interpreting non-verbal cues (e.g., Body language), to gauge the prospect’s understanding and
acceptance of what is discussed.

4) Handling Buyer Resistance:

It is rare instance when a salesperson does not receive resistance from a prospect. By resistance
from a prospect. By resistance we are referring to a concern a prospect has regarding the
product (or company) and how it will work of their situation. In most cases the resistance is
expressed verbally (e.g., “I don’t see how this can help us.”) but other time the resistance
presents itself in a non verbal fashion (e.g., prospect facial expression shows disinterest).

To overcome resistance, salesperson are trained to make sure they clearly understand the
prospect concern. Sometimes prospects says one thing that appears to be an objection to the
product but, in fact, they have another issue that is preventing from them agreeing to a
purchase. Salesperson are rarely able to make the unless resistance is overcome.

5) Closing the Sale:

This part of the selling process is the most difficult. Closing the sale is the point when the seller
asks the prospect to agree to make the purchase. It is also the point at which many customers
are unwilling to make a commitment and, consequently, respond to the seller’s request by
saying no. Closing the sale is actually fairly easy if the salesperson has worked hard in
developing a relationship with the customer. Unfortunately some buyers, no matter how
satisfied they are with the seller and their product may be insecure or lack confidence in making
 buying decisions. For these buyer, salespeople must rely on persuasive communication skill that
help assist and even persuade a buyer to place an order.
The use of persuasive communication technique is by far the most controversial and most
misunderstood concept related to the selling process. Many people think that the act of
persuasion is an attempt to manipulate someone into doing something they really do not want to
do. However, for sales professional persuasion is a skill for assisting someone in making a
decision. Many times buyers take the lead in closing a sales since they are convinced the
product is right for them.

6) Account Maintenance:
While account maintenance is listed as the final activity in the selling process, it really
amounts to the beginning of the next sale and, thus, the beginning of a buyer-seller relationship. In
selling situation where repeat purchasing is a goal (compared to a one-time sale), following up with a
customer is critical to establishing a long-term relationship.

After a sale, salespeople can help the customer be even more satisfied with the purchase. The level and
nature of after sale follow-up will often depend on the product sold. Expensive, complex purchases that
require installation and training may result in the salesperson sending considerable time with the
customer after the sale while smaller purchases may have the seller follow up with simple e-mail
correspondence.
By maintaining contact after the sale the seller is in a position to become more accepted by the
customer, which in variably leads to the salesperson learning more about the cutomer’s business. With
this knowledge the salesperson will almost always be presented with more selling opportunities.

i) Personal Selling Roles:

There are four major types of selling roles: order getters, order takers, order influencer, and sales
support. It should be noted that these roles are not mutually exclusive and that a salesperson can perform
more than one and possibly all activities.

ii) Order Getters- The role most synonymous with selling is a position in which the salesperson is
actively engaged in using their skill to obtain orders from customers. Such roles can be further divided
into:

a) New Business Development- A highly challenging yet potentially lucrative sales position is one
where the main objective is to find new customers. Sales jobs in this category are often in fields that are
very competitive, but offer high rewards for those that are successful. The key distinguishing factor of
these positions is that once a sale is made new business salespeople pass customer on to others in their
organization who handle account maintenance. These positions include:

b) Business Equipment Sales- These salespeople are often found in industries where a company’s main
profits come from the sale of supplies and services that come after an initial equipment purchase. The
key objective of business equipment salespeople is to get buyers to purchase the main piece of
equipment for which supplies and service are needed in order for the equipment to function. For
instance, in the Xerox machine industry certain salespeople only seek out new accounts and once a
Xerox machine sale is made they pass along the account to other sales personnel who handle the sales of
maintenance and supply products.
c) Telemarketing- This category includes product sales over the phone, whether aimed at business or
consumer. While in some countries, laws restrict unsolicited phone selling, the practice is still widely
used in the business market.

d) Consumer Selling- Certain companies are very aggressive in their use of salespeople to build new
consumer business. These include: retailers selling certain high priced consumer products including
furniture, electronics and clothing: housing products including real estate, security services, building
replacement product (e.g PVC windows); and in home products sellers including those selling door-to-
door and products sold at “kitty party” events such as cosmetics, kitchenware and decorative products

Q1.b) What do you mean by enterprise relationship?

Ans. In recent years, customer have been downsizing their supplier base and replacing their multiple
vendors with a very small number of possibly long-term relationships offered only to select few
suppliers. A widely quoted figure is that customers are working today with one-third fewer suppliers
than they did 10 years ago. Combined with merger trends and market consolidation, the trend towards
purchasing from fewer suppliers has resulted in customer capable of leveraging the volume of their
purchases for enhanced services and cost-cutting opportunities. The response of many seller to the
emergence of very large and powerful customer has been to develop a system of enterprise relationship
to better meet the needs of their major customers.
An enterprise relationship is one in which the primary function is to leverage any and all corporate
assets of the supplier in order to contribute to the customer’s strategic success. in such a situation, both
the product and the sales force are secondary, and the customer must be of strategic importance to the
selling organization. To achieve successful enterprise relationships, the supplier must deliver
exceptional customer value while also extracting sufficient value from the relationship. This is always
challenging, especially when the customer has large needs.

Following are some of the ways in which other companies have made strategic partner relationship
work.
i) Suppliers are involved in the early stage of need identification, specification and new product
development.
ii) In conventional relationships, the primary players were the salesperson, the customer service
representative, and perhaps a design engineer. With enterprise relationships, the supplier field a team
that interfaces with the customer on a regular basis, and includes a variety of functional areas and
management levels.
iii) In enterprise relationships, there is an unusually high degree of intimacy resulting in immediate
responsiveness from suppliers, sharing of information radical empowerment of supplier, and termination
of the relationship as a remote and difficult option.

Q.2)a) Differentiate between sales quota and sales territories.

Ans. Sales quota are a way of life for the sales force. All activities of the sales force revolved around
the fulfillment of sales quota. Sales quota are targets assigned to sales personnel. They signify the
performance expected from them by the organization. Sales quota help in directing, evaluating and
controlling the sales force. They from an indispensable tool for sales manager to carry out sales
management activities. Sales quota are prepared on the basis of sales forecasts and budgets. Sales quota
serve various purposes in organization.

They provide target for sales personnel to achieve and also act as standards to measure sales force
performance and help motivate the sales force. Compensation plan are invariably linked to quotas. The
commission and bonuses given to sales person are based on their meeting quotas set for them. The four
category of sales quotas widely used are :
i) Sales volume quota,
ii) Expense quota,
iii) Activity quota and
iv) Profit quota.
Sales Territories, typically consist of a geographical area or a set of prospects or customers. They often
develop over time based on historical precedent, internal organizational problem, or need to temporarily
create sales coverage. Such non-systematic territory design methods are also unable to easily adapt to
change.
To effectively design territories and provide focus and direction to the sales force, each step in the
process- from strategy formulation to analysis of result- must be properly aligned. Problem occur when
territories are designed using a non-systematic, non-flexible process, which results in a less than optimal
utilization of sales resources and lower than desired sales performance.
For most companies, the sales force is one of their most expensive human resource investment, with
sales calls costing upward of several hundred rupees.
Companies have turned to sales force automation (SAF) systems, customer relationship management
(CRM) system, enhanced sales training and account management programs to gain more productivity
from their sales force. While each of these initiatives has merit, many companies have found that a sales
territory alignment initiative can increase productivity and sales at a relatively low cost.

Q2.)b) Briefly explain the function of logistic management.

Ans. Logistic management is that part of supply chain which plans, implement and controls the
efficient, effective forward and reverse flow and storage of goods, services and related information
between the point of origin and the point of consumption in order to meet customers’ requirements. A
professional working in the field of logistic management is called a logistician.
Logistic management activities typically include inbound and outbound transportation management,
fleet management, warehousing, material handling, order fulfillment, logistic network design, inventory
management, supply/demand planning, and management of third party logistic services providers.

Logistic Functions:
The logistic function includes sourcing and procurement, production planning and scheduling,
packaging and assembly, and customer service. It is involved in all levels of planning and execution-
strategic, operational and tactical. Logistic management is an integrating function, which coordinates
and optimizes all logistic activities, as well as integrates logistic activities with other functions including
marketing, sales manufacturing, finance information technology. Logistic is much wider than mere
physical handling of goods. Logistic involves several other functions such as purchasing, plant location,
plant layout, etc and even the disposal of wastes. It covers astonishingly varied professional disciplines.
They are:
i) Facility location
ii) Planning
iii) Forecasting and order management
iv) Transportation: The mode and the route
v) Inventory management: all inventories
Raw material and finished product had always to be moved though on a small scale. Thing began
changing with advance in transportation. Population began moving from rural to urban areas and to
business centers. No longer did people live near production take place near residence centers. The
geographical distance between the production point and consumption point increased.
Since the early 1990’s the business scene has changed. The globalization, the free market and the
competition has required that the customer gets the right material, at the right point and in the right
condition at lowest cost. The globalization and is not unusual today. Here are some of the logistic
functions that allowed this to happen.

i) Purchasing – of raw materials, assembled products, finished products from all over the world.
Where can you want at the best price?
ii) Manufacturing operations – How should the machine be organized, how many workers do
you need, where do you stock your material and finished products, how many products do
you manufacture on each production run, etc.
iii) Transportation – Domestic and international, from raw material to finished product; that
moves what, and when and for what price?
iv) Warehousing – products is either moving (transportation) or not (warehousing). This is
becoming a very sophisticated area and a key to shortening the time to market for products.
v) Inventory control – How much product is on hand, on order, in transit, and where is it?
Inventory derives logistics.
vi) Import/export – international regulations and documentation can be complex. It takes a
specialist to understand the best way to get product across borders.
vii) Information system – globalization on today’s scale is possible because there is technology
that transfers the need information. Logistic functions are unavoidable costs to a company,
but today they are recognized as crucial to a company’s competitiveness and profitability.

Q.3) The marketing manager of Hasan Group Ltd. Mr. Arujn was thinking about designing a new
distribution channel strategy so as to improvise the distribution system. What key factors should he
consider when designing a strategy related to distribution channel?

Ans. The market must consider many factors when establishing a distribution system. Some factors are
directly related to marketing decisions while other are affected by relationship that exist with member of
the channel.

Marketing Decision Issues: Distribution strategy can be shaped by how decision are made in other
marketing areas as under:

Product Issues
The nature of the product often dictates the distribution options available especially if the product
requires special handling. For instance, companies selling delicates or fragile products, such as flower,
glass articles, etc, look for shipping arrangement that are different than those sought for companies
selling extremely tough or durable products, such as steel rods.

Promotion Issues
Besides issues related to physical handling of products, distribution decision are affected by the type of
promotional activities needed to sell the product to consumers.

Pricing Issues
The desire price at which a marketer seeks to sell their product can impact how they choose to distribute

Target Market Issues

A distribution system is only effective if target customers can obtain the product. Consequently, a key
decision in setting up a channel arrangement is for the marketer to choose the approach that reaches
target customers in the most effective way possible. The most important decision with regard to reaching
the target market is to determine the level of distribution coverage needed to effectively meet customer’s
need.

Level of Distribution Coverage:

There are three main levels of distribution coverage- mass coverage, selective and exclusive.

Mass Coverage- The mass coverage (also know as intensive distribution) strategy attempts to distribute
products widely in nearly all locations in which that type of product is sold.

Exclusive Coverage- Some high-end products target very narrow market that have a relatively small
number of customers. These customers are often characterized as “discriminating” in their taste for
product and seek to satisfy some of their needs with high-quality, though expensive products.

As already discussed, the alternative channels a company can choose from are:
a) Direct Sale ( which provides the advantage of direct contact with the consumer);
b) Original Equipment Manufacturer (OEM) sales (in which a company’s product is sold to another
company that incorporates it into a finished product);- manufacture representatives (salespeople
operating out of agencies that handle an assortment of complimentary products);
c) Wholesaler ( who generally buy goods in large quantities, warehouse them, then break them down
into smaller shipment for their customer- usually retailer);
d) Brokers (who acts as intermediaries between producer and wholesalers or retailers);
e) Retailer (which include independent store as well as regional and national chains);

SET 2

Q.1)a) What is demand forecasting? Explain the basic approach to forecasting demand.
Ans. The forecasting of demand forms the basis for all strategic and planning decisions in a supply
chain. Throughtout the supply chain, all push process is performed in anticipation of customer demand
whereas all pull process is performed in response to customer demand. For push process, a manager
must plan the level of available capacity and inventory.

Basic Approach to demand forecasting

The following basic, six – steps approach helps an organization perform effective forecasting:
1. Understand the objective of forecasting
2. integrate demand planning and forecasting throughout the supply chain
3. Understand and identify customer segments
4. identify the major factors that influence the demand forecast
5. Determine the appropriate forecasting technique
6. Establish performance and error measures for the forecast

Understand the objective of forecasting

The objective of every forecast to support decisions that are based on the forecast, so an important first
step is to clearly identify these decisions. Examples of such decisions include how much of a particular
product to make, how much to inventory, and how much to order. All parties affected by a supply chain
decision should be aware to the link between the decision and the forecast.
For example, if wal-mart plans a promotion in which it will discount detergent during the month of july,
This information must be shared with the manufacturer, the transporter, and others involved in filling
demand as they all have decisions to make that will be affected by the forecast of demand. All parties
should come up with a common forecast for the promotion and a shared plan of action based on the
forecast. Failure to make these decisions jointly may result in either too little product in various stage of
the supply chain.

Integrate Demand Planning and Forecasting Throughout the Supply Chain:

A company should link its forecast to all planning activities throughout the supply chain. These include
capacity planning, production planning, promotion planning, and purchasing, among others. This link
should exist at both the information system and the human resource management level. As a variety of
function are effected by the outcomes of the planning process, it is important that all of them are
integrated into the forecasting process. In one unfortunately common scenario, a retailer develops
forecasts based on promotional activities, whereas a manufacturer, unaware of these promotions,
develops a different forecast for their production planning. As a result, the manufacturer may not have
enough products for the retailer, ultimately leading to poor customer service.

Identify Major Factors that Influence the Demand Forecasting

Next, a firm must identify major factors that influence the demand forecast. A proper analysis of these
factors is central to developing an appropriate forecasting technique. The main factor influencing
forecasts are demand, supply and product- related phenomena.

On the demand side, a company must ascertain whether demand is growing, declining, or has a seasonal
pattern. These estimates must be based on demand-not sales data for example, a supermarket may have
promoted a certain brand of cereal in july 2002. As a result, the demand for this cereal may have been
high while the demand for others, comparable cereal brand was low in july.
The supermarket should not use the sales data 2002 to estimate that demand for this brand will be high
in july 2003, because this will only be the case if the same brand is promoted again in july 2003 and
other brand respond as they did the previous year. When making the demand forecast, the supermarket
must understand what the demand would have been in the absence of promotion activity and how
demand is effected by promotion. A combination of these two pieces of information will allow the
supermarket to forecast demand for july 2003 given the promotion activity planned for that year.

Determine the Appropriate Forecasting Techniques

Next, a firm must identify major factor that influence the demand forecast. A proper analysis of these
factor is central to developing an appropriate forecasting technique. The main factor influencing forecast
are demand, supply, and product related phenomena.
On the demand side, a company must ascertain whether demand is growing, declining or has a seasonal
pattern. These estimates must be based on demand not sales data. For example, a supermarket may have
promoted a certain brand of cereal in july 2002. As a result, the demand for this cereal may have been
high while the demand for others, comparable cereal brands was low in july.
The supermarket should not use the sales data from 2002 to estimate that demand for this brand will be
high in july 2003 because this will only be the case if the same brand is promoted again in july 2003 and
other brands respond as they did the previous year. When making the demand forecast, the supermarket
must understand what the demand would have been in the absence of promotion activity and how
demand is affected by promotion, A combination of these two pieces of information will allow the
supermarket to forecast demand for july 2003 given the promotion activity planned for that year.

Q.1.b) Define supply chain management.

Ans. Most OEMs no longer compete solely as autonomous corporations. They also compete as
participants in integrated supply chain. This revolution, which is changing the ways product are
designed, produce, and delivered, has the potential to alter the manufacturing landscape as dramatically
as the industrial revolution or the advent of mass production. The focus is on changing nature of supply
chains and effort to optimize their performance.
In the past, OMEs typically drove down the cost of purchased materials through aggressive negotiation,
imposing terms and conditions that minimized supplier profitability and often left supplier in a
weakened condition. More recently, OMEs have begun to adopt a strategic partnership approach, which
recognize that increased, sustainable benefits can accrue from term relationship between participants in
the supply chain (a win-win situation). The approach consider total life-cycle costs over multiple
iteration of a product, with the goal of increasing mutual benefits for all participation in the long run.

Concept Of Integration
An integrated supply chain can be defined as an association of customers and suppliers who, using
management techniques, work together to optimize their collective performance in the creation,
distribution, and support of an product. It may be helpful to think of the participants as the divisions of a
large, vertically integrated corporation, although the independent companies in the chain are bound
together only by trust, shared objectives, and contract entered into a voluntary basis.
All supply chain are integrated to some extent. One objective of increasing integration is focusing and
coordinating the relevant resources of each participants on the need of the supply chain to optimize the
overall performance of the chain. The integration process requires the disciplined application of
management skill, processes, and technology to couple key function and capabilities of the chain and
takes advantage of the available business opportunities.
Goals typically include higher profit and reduce risk for all participants. Traditional unmanaged (or
minimally managed) supply chain are characterized by
i) Adversarial relationship between customer and supplier, including win-lose negotiation;
ii) Little regard for sharing benefits and risk;
iii) Short-term focus, with little concern for mutual long term success;
iv) Primary emphasis on cost and delivery, with concern for added value;
v) Limited communications;
vi) Little interaction between the OME and suppliers more than one or two tires away.

Q.2.a) Find out difference and similarities in wholesaling and retailing.

Ans. Wholesaling refers to the activities involved in selling to organizational buyers who intend to
either resell or use for their own purpose. A wholesaler is an organization providing the necessary means
to: 1) allow suppliers (e.g manufactures) to reach organizational buyers (e.g retailers, business buyers),
and 2) allow certain buyers to purchased product which they may not be able to purchase otherwise.
According to the 2002 census of wholesale trade, there are over 430000 wholesale operation in the
united states.
While many large retailers and even manufactures have centralized facilities and carry out the same
tasks as wholesaler we do not classify these as wholesalers since these relationship only involve one
other party, the buyer. Thus, a distinguishing characteristic of wholesaler is that they offer distribution
activities both for a supplying party and for a purchasing party. For our discussion of wholesaler we will
primarily focus on wholesaler who sell to other resellers such as retailers.
Retailing consist of the sale of goods or merchandise for personal or household consumption either form
a fixed location and related subordinates services. Defined here as sales good between two distant
parties where the deliverer has no direct interest in the transaction, the earliest instance of distance
retailing probably coincided with the regular delivery or postal services. Such services would have
started in earnest once man had learned how to ride a camel, horse etc.
Q.2.b) What do you mean by supply chain integration?
Ans. Most OEMs no longer compete solely as autonomous corporations. They also compete as
participants in integrated supply chain. This revolution, which is changing the ways product are
designed, produce, and delivered, has the potential to alter the manufacturing landscape as dramatically
as the industrial revolution or the advent of mass production. The focus is on changing nature of supply
chains and effort to optimize their performance.
In the past, OMEs typically drove down the cost of purchased materials through aggressive negotiation,
imposing terms and conditions that minimized supplier profitability and often left supplier in a
weakened condition. More recently, OMEs have begun to adopt a strategic partnership approach, which
recognize that increased, sustainable benefits can accrue from term relationship between participants in
the supply chain (a win-win situation). The approach consider total life-cycle costs over multiple
iteration of a product, with the goal of increasing mutual benefits for all participation in the long run.
Costs of integration: The costs, complexities and risk of fully integrating and managing a highly
integrated supply chain can be as the costs of integrating and operation a corporation of comparable size.
Thus, most supply chain integration efforts to date have been very limited in scope. Some of the major
costs are listed below:
i) time devoted to managing, training and support
ii) Effort develop to becoming a better customer
iii) Investment in supply chain integration software and compatible information system
throughout the chain
iv) Opportunity costs
v) Risk of production stoppages

Because the extent of interconnectedness and interdependency makes highly integrated chain
increasingly vulnerable to disruption, the risk of production stoppages should not be overlooked. A
highly integrated, interdependent supply chain that consist primarily of sole-source suppliers practicing
just-in-time manufacturing with minimal inventories is highly reliant on the timely delivery of quality
components and services. Failure by one participant to deliver can rapidly bring other parts of the chain
to a halt. This happens, on occasion, even to the best suppliers and logistic providers.

Q.3 Discuss the recent issues related to application of information technology in supply chain
networks.
Ans. In modern management information has become a central features of management planning and
control. Computers and information technology have been used to support logistic and supply chain
management for many years. The application of information technology to process of planning and
control of supply chain activities has grown rapidly with the introduction of microcomputers in the early
1980s. nowadays, information technology is viewed as the key father that will affected the growth and
development of logistic and supply chain management.

Importance of Logistics and Supply Chain Information System and Information Technology

i) Effective information management can help ensure that a firm meets the logistic needs of its
customers. Firms need to place priorities on logistical elements such as on time delivery,
stock out level, order status, shipment tracking and expediting, order convenience, order
completeness, creation of customer pick up back up- haul opportunities and product
substitution.
ii) Logistic information system combine hardware and software to manage, control and measure
logistic activities which occur within specific firms as across the overall supply chain.
iii) Companies need better information on their customers, information on their suppliers. Areas
of technology system including decision support system/information technology and logistic
management activities were not delivering needed information to the management for
making strategic decision.
iv) The order processing system is the never center of the logistics and supply chain system. A
customer orders provides the communication messages to set the logistic process in motion.
The cost and efficiency of the entire operation are impacted by the speed and quality of the
information flows. Slow and erratic communication can result in loss of customers or
excessive transportation. Inventory and warehousing cost together with possible
manufacturing inefficiencies caused by frequent changes in the production line.
v) Leading edge organizations are utilizing computers-extensively to support logistic activities.
Computers are used in order entry, order processing, freight goods inventory control,
performance measurement freight audit/payment and warehousing. World class logistic
practices include use of logistics information systems as a key to competitiveness.
vi) Computer based decision support system (DSS) support the executive decision making
process in logistic and supply chain management. To support time based competition, firms
are increasingly using information technologies as source of competitive advantage.
vii) Today companies are restructuring their businesses to function in the new era of electronic
commerce. Organization can have a deluge of information on dotcoms, business to business
requirements and online customers and supplier linkages. ERP system, purchasing databases
and data warehouses, electronic data interchange(EDI), business to business electronic
commerce are recent developments which are applied in logistic and supply chain
management.