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Psm 604 Distribution Logistics Town Campus Question Paper
Psm 604 Distribution Logistics Town Campus
Course:Masters Of Business Administration Procurement And Supply Management
Institution: Kca University question papers
Exam Year:2014
UNIVERSITY EXAMINATIONS: 2013/2014
EXAMINATION FOR THE MASTERS OF BUSINESS ADMINISTRATION
(MBA) PROCUREMENT AND SUPPLY MANAGEMENT
PSM 604 DISTRIBUTION LOGISTICS TOWN CAMPUS
DATE: AUGUST, 2014
TIME: 3 HOURS
INSTRUCTIONS: Answer Question One and Any Other Three Questions
QUESTION ONE (31 MARKS)
GATEWAY: A DIRECT SALES MANUFACTURER.
Gateway is a manufacturer of PCs that was founded in 1985 and started as a direct sales manufacturer
with no retail footprint. In 1996, Gateway was one of the first PC manufacturers to start selling PCs
online. Over the years Gateway expanded its operations worldwide, with sales and manufacturing
presence in Europe and Asia Pacific. In 1999, the company had three plants in the United States, a
plant in Ireland and one in Malaysia.
In the late 1990s, Gateway introduced an aggressive strategy of opening Gateway retail stores
throughout the United States. By January 2002, Gateway had approximately 280 stores in the United
States. Gateway’s strategy was to avoid carrying any finished-goods inventory at the retail stores and
simply use these stores for customers to try the PCs and obtain help in deciding on the right
configuration to purchase. When customers placed their order, PCs were manufactured to order and
shipped from one of the assembly plants.
Initially, inventors rewarded Gateway for this strategy and raised the stock price to more than $80 per
share in the late 1999. However, this succession did not last. By November 2002, Gateway shares had
dropped to less than $4 and Gateway was losing a significant amount of money. Plants in Salt Lake
City, Ireland and Malaysia were shut. By April 2004, Gateway had closed all its retail outlets and
reduced the number of configurations offered to customers. The company was looking to sell its PCs
1
through electronics retailers such as Best Buy and Circuit City. As you can imagine, this was quite a
transition for the company to experience.
Required:
(a) What role would effective and efficient logistics play in the success of Gateway?
(b) Discuss the various supply chain management challenges experienced by Gateway. (10 Marks)
(c) Suggest a suitable distribution strategy for Gateway outlining its inherent advantages.
(d) (5 Marks)
What are the main functions of inventory management in the case of Gateway as a
manufacturer?
(10 Marks)
(6 Marks)
QUESTION TWO (23 MARKS)
Write short notes on the following concepts and their contribution to the Goals of Logistics.
(i)
Business logistics.
(8 Marks)
(ii) Military logistics.
(7
Marks)
(iii)Events logistics.
(6
Marks)
QUESTION THREE (23 MARKS)
(a)
Warehousing is often defined as the storage of goods. Explain in details the basic warehousing
decisions that are faced by modern organizations.
(b)
(13 Marks)
Discuss the various types/categories of inventory in warehousing. (10 Marks)
QUESTION FOUR (23 MARKS)
(a) Distinguish between the terms Demand Chain and Supply Chain.
(b) ICT tools play a critical role in warehousing. Briefly highlight some of the ICT tools which are
widely used in warehousing.
(8 Marks)
(15 Marks)
QUESTION FIVE (23 MARKS)
Distribution logistics is a critical component of supply chain management. Discuss at least FOUR
theories that have shaped the development of supply chain management as a discipline of study.
QUESTION SIX (23 MARKS)
2
Using both the macro perspective and the micro prospective view of logistics, describe the role of
logistics in the economy.
3
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