Study Guide for Contract Design and Chapter 4, 5, 6, 7

Study Guide for Contract Design and Chapter 4, 5, 6, 7
Contract Design:
1. Purpose of contracts for SCM.
2. How does a newsvendor determine the best order quantity, conceptually? What
needs to be balanced?
3. How to determine the underage and overage cost for a given situation?
4. How to calculate expected profit for newsvendor problem?
5. Why does the buyback contract improve the supply chain performance? You need
to understand the fundamental ideas behind by reviewing the example I went
through in class.
6. Does all buyback price lead to the same system performance?
7. Other advantages and disadvantages of buyback contracts.
8. How do other contracts work besides the buyback contract? What is the principle
behind all of these contracts?
Bullwhip Effect:
1. Explain in plain language what the bullwhip effect is. What are the practical
2. What causes the bullwhip effect? You need to understand this intuitively.
3. What are problems associated with the bullwhip effect?
4. Give intuitive explanations about the two formulas for the multi-stage systems.
What are the practical implications?
5. How to reduce the bullwhip effect?
Push-Pull Strategies:
1. Understand fundamentally how each strategy works, push, pull, and push-pull.
2. Advantages and disadvantages or each strategy and when to apply each strategy.
3. Why push-pull strategy is related to the principles of forecasting?
4. Principles behind choosing the push-pull boundary. What are focuses of each side?
Is the location of the boundary same for all industries? Why?
5. How does internet change the application of push pull strategies for online
industries? Brick and mortar stores?
6. How does e-fulfillment change the logistic structure?
7. The characteristics of three different distribution strategies. How do they work?
Advantages and disadvantages of each strategy.
Strategic Alliances:
1. What are the options a company should consider if it does not have an efficient
logistic system? Look for answers in the textbook.
2. How does each type of RSP work? What are the main differences between the
four types of RSP?
3. What are the requirements to implement RSP and what are potential problems?
4. Advantages and disadvantages of RSP.
5. Are all RSP successfully implemented in practice?
6. Describe in plain language what 3PL is. Advantages and disadvantages.
7. Describe the ideas behind the DI. You may want to read the textbook for more
detailed description.
Procurement and Outsourcing:
1. Benefits and risks of outsourcing.
2. Concepts of integral and modular products? Can you come up with examples?
3. What to outsource and what not to? Understand intuitively the Fine & Whitney
4. Why do we want to study B2B?
5. How does Freemarkets work? And how does the company make money (its
business model)? Why did so may E-market makers go out of business? You may
want to read the textbook for more in-depth explanations.
6. Understand 5 different E-markets and their differences. Be able to describe in
your own language.
7. Understand where to procure each type of products: strategic components,
commodity products, and indirect material. You need to understand why the
strategy we learned in class makes sense, not just memorize the results.
8. What is the portfolio approach for the commodity? Describe in plain language.