The Distribution Network Affects The Cost Of The Four Supply Chain Drivers

1421 Words Jul 6th, 2015 6 Pages
#21
In no more than 300 words (single-spaced), explain how the design of the distribution network affects the cost of the four supply chain drivers. (5 points)

Answer:
According to the text, the supply chain drivers are: 1) facilities, 2) inventory, 3) transportation, 4) information, 5) sourcing, and 6) pricing (p. 41- 42). Investopedia defines a distribution network as a process that any firm would use to distribute products from a manufacturer to a seller (Investopedia, LLC, 2015)

The distribution network would have an impact on the cost of any of the supply chain drivers because the way that a company distributes a product would have an impact on how the costs would change to use a facility, to maintain or create inventory, to transport the goods, and to create information systems, to price the inventory/logistics, and to source or outsource any portion of the process. For example, if Coca Cola were to change its strategy and create other promotions, especially having to do with its Coke Points website in getting free sodas or merchandise, it would impact the demand of the sodas. If there were a higher demand of sodas due to customers getting free or discounted sodas then obviously the pricing would change, the transportation costs would heighten or other modes of transportation would be needed for the heavier load, there would be more facility costs because of the heavier capacity of facility or more manufacturing facilities needed to make sodas, and then the…

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