3a) Explain with example what is vertical and horizontal supply chain relationship and how they differ from each other.

Vertical relationship is when a company has control of or expands their business into each step of a process, like different points of the same production path.
Example: A car company that chose to expand into tire manufacturing, which would fit how you've defined vertical integration.

Horizontal relationship is when a business tries to become a monopoly by buying other companies that hold similar products, and essentially acquiring the competitors so that they become a monopoly.
Example: hot dog vendor choosing to expand and offer hamburgers. Who's already established who wanted to expand to choose to offer another popular food item, in this case hamburgers.

4a) Describe the various stages in a carrier selection decision process.

It consists of twofold process. 1. The firm selects a transportation mode which include basic mode of rail, water, truck, air and pipeline. 2. To select a specific carrier from within the chosen mode or intermodal form by choosing the legal carrier type of common, regulated, contract, exempt or private.

4b) Explain each of the important determinants and consideration for selecting a carrier.

Transportation cost - Important criterion such as rate, minimum weights, loading and unloading facilities, packaging and blocking, damage in transit and special services from a carrier.

Transit time – Time elapsed from the time the consignor makes the goods available for dispatch until the carrier delivers same to the consignee.

Reliability - Refers to the consistency of the transit time a carrier provides.

Capability – refers to the carrier’s ability to provide the equipment and facilities that the movement of a particular commodity requires.

Accessibility – the carrier ability to provide service cover over the route in question and also the physical access to facilities.

Security – concerns the arrival of goods in the same condition they were in when tendered to the carrier

5a) Provide examples to show the difference between Dependant demand and Independent Demand items? Why is this difference important to the inventory managers.

A pharmaceutical firm offers a new drug:
The firm can try to predict demand for the drug, or even try to manipulate demand through pricing incentives and other marketing efforts, BUT…
…ultimately, demand is determined by the marketplace.
Suppose the pharmaceutical firm decides to manufacture 15,000 bottles of the new drug every other week based on a forecast of the independent demand.
Based on this, the inventory manager knows exactly how many bottles and caps are needed and when because the demand for these items is dependent on the production schedule of 15,000 bottles every other week.
The bottles and caps are dependent demand items because
1) the firm controls their demand through the production schedule, and
2) their demand is tied to the production of finished bottles.

5b) Pull and Push • Pull approach is a “reactive” system, relying on customer demand to “pull” product through a logistics system. Example: Macdonald.

• Push approach is a “proactive” system, and use inventory replenishment to anticipate future demand. Example: Selling only how many SKU you have in hand only.

6) Explain the concept of JIT inventory management system and the 6 difference between JIT and the EOQ approach to inventory management.

The concept of just-in-time requires companies to order enough materials for production and complete all work in process at the end of the day and ship finished goods to customers as they are produced.

1. JIT attempts to eliminate excess inventories for both buyer and seller 2. JIT system involve short production runs with frequent changeovers 3. JIT minimizes waiting lines by delivering goods when and where needed 4. JIT uses short, consistent lead times to satisfy inventory needs in a timely manner 5. HIT relies on high quality incoming product and on exceptionally high-quality inbound logistics operation 6. JIT requires a strong, mutual commitment between buyer and seller, emphasizing quality and win-win outcomes for both partners.

7a) List and explain the different documents used in Domestic Transportation.

Bill of Lading – Provide information the carrier needs to accomplish the move, stipulates the transportation contract terms, acts as a receipt for the goods the shipper tenders to the carrier and in some cases, shows the certificate of title to the goods.

Freight Bill – Carrier’s invoice for the charges the carrier bears in moving a given shipment. It lists the shipment, the origin and destination, the consignee, the items, total weight and total charges which also specifics the credit time period for payment.

Freight Claims – A document that the shipper files with the carrier to recoup monetary losses resulting from loss, damage, or delay to the shipment or to recover overcharge payments.

F.O.B term of sales – determine the logistics responsibility that the buyer and seller will incur such as 1. Who is to incur transportation charges. 2. Who is to control movement of the shipment. 3. Where the title passes to the buyer.

7b) What are the differences between a Straight Bill of Lading and Order Bill of Lading? Which Bill of Lading would you prefer use to safeguard the seller. Why?

Order Bill is capable of transferring title to the goods covered under it by its delivery or endorsement. Its terms provide that the freight is to be delivered to the consignee of the bill, to the order of a named party, or, as recognized in overseas trade, to a named person or assigns, a bill, as a document of title, is negotiable.

In the other hand, a straight bill of lading is not negotiable. It's issued to a specific company or person. Therefore, its terms will specify that the goods are to be delivered to the consignee only.

From a perspective of a seller, A straight bill of lading is non-negotiable and transferable. This means that the shipment is consigned directly to the consignee. The buyer owns the right of the shipment.