Ramping Up for Bargain Days

November 20, 2017
Ramping Up for Bargain Days

Article Title: What impact are bargain days having on peak planning and supply chain?

Author of Article: Andrew Tavener

Date of article: November 10, 2017

Source URL: http://www.supplychaindigital.com/scm/what-impact-are-bargain-days-having-peak-planning-and-supply-chain

Supply chains have to deal with the growing impact of ‘bargain days’ on inventory management and logistics delivery.  Instead of traditional peak demand seasons, firms are increasingly experiencing peak demand year round due to marketing promotions.

Discussion Questions
1. How can the bullwhip effect be controlled when dealing with a responsive supply chain that includes forward buying as a major issue?

Guidance: Review the differences between an efficient and responsive supply chain; review the bullwhip effect. Students should be asked to outline the steps to take to minimize the bullwhip effect. The discussion should include the use of technology to track inventory and plan ahead with collaborative forecasting.

2. What difference will dependent versus independent demand have on the inventory required for peak planning periods in a responsive supply chain?

Guidance: Review dependent and independent demand for inventory. Ask students to argue for and against the Q-model and the P-model in regards to the different types of demand. Which model is best suited for peak demand? How can safety stock be reduced? You may introduce risk pooling as a way to reduce safety stock at this juncture.

3. How would a price-break model be helpful with the forward buying issue?

Guidance: Review the price-break model and forward buying. Students should be asked to consider the importance of forecasting in their answers, and to consider what assumptions must be satisfied in order for the price-break model to prove helpful for the forward buying issue.

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