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Scenario A, You are currently employed by highway assemblers, who assemble motorbike parts in Kenya. The management is making a decision of whether to continue...

      

Scenario A, You are currently employed by highway assemblers, who assemble motorbike parts in Kenya. The management is making a decision of whether to continue importing the parts or complete bike from China.

Required:

(a) Explain to them the factors to be considered in making such a decision.

(b) Discuss the limitations of partnership sourcing.

(c) Explain the benefits and limitations of international sourcing.

(d) Why is a market analysis necessary in sourcing?

(e) Discuss the disadvantages to an organization the application of EDI (Electronic

Data Interchange) in the process of sourcing for its material or spare parts.

  

Answers


Mageto
a).Factors for the decision
1.If Kenya has the capacity to assemble the parts to make a bike.

2. Whether the cost of a complete bike is satisfactory

3.If there is variations in the taxation levied on the parts and that of a complete bike

4. Whether the variations in the expected profit margins for parts and a complete bike is desirable.

5. Whether there is a ready market for the complete bike (demand)

6. If it involves a distribution cost involved

b). Limitations of spurcing
1. It is limited to profit sharing
2. Long decision making Chanel since it involves more than one parties.


C.Benefits of sourcing
1. Cheaper cost
2. High quality of goods or services


Limits of sourcing
1. High taxation cost
2. Frustrations from the host country
3. Brain drain

d). Importance of market analysis
1. Helps in identifying the market gaps
2. Helps in identification and analysis of the main competitors
3. Market analysis helps in discovering new products to satisfy a given market segment
4. Market analysis helps in identifying various segments and tailoring products towards satisfying the needs.
5. Market analysis helps in formulation of competitive strategies.

e. Disadvantages of EDI
1. No bargaining on electronic data interchange.
2. High uncertainty rate
3. High cost of communication since it requires expensive gadgets such as a laptop or a smart phone.



Real Educator answered the question on September 14, 2018 at 13:03


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