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• Risk Mitigation in Global Economic Downturn: Diversification is a key strategy to mitigate financial risk during economic downturns.
• Actions Considered:
• Conclusion: Expanding the customer base globally is the most effective action to mitigate financial loss by spreading revenue sources and reducing dependency on a single market.

References

• "Global Supply Chain Management: Leveraging Processes, Measurements, and Tools for Strategic Corporate Advantage" by G. Tomas M. Hult, David J. Ketchen Jr., and Elnora W. Stuart.
• APICS Dictionary, 16th Edition.

Network planning is the process by which a firm structures and manages its supply chain to achieve optimization. This involves designing the network of suppliers, manufacturers, warehouses, and distribution centers to minimize costs and maximize service levels. Network planning includes decisions on facility locations, transportation modes, inventory levels, and the flow of goods through the supply chain. Options A, C, and D address different aspects of supply chain management but do not specifically refer to the comprehensive design and management process implied by network planning.

References:

• Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Operation.
• https://www.investopedia.com/terms/n/networkplanning.asp

Drop shipping is a fulfillment method where retailers do not keep products in stock but instead transfer customer orders and shipment details directly to the supplier or manufacturer, who then ships the goods directly to the customer. Here’s how it works step-by-step:

• Customer Order: A customer places an order with the retailer.
• Order Transfer: The retailer forwards the order and shipping details to the supplier or manufacturer.
• Supplier Fulfillment: The supplier or manufacturer prepares the order and ships it directly to the customer.
• Inventory Management: The retailer does not handle or store inventory, reducing warehousing and logistics costs.
• Benefits: This method can reduce inventory holding costs, minimize handling time, and improve cash flow for the retailer, as they do not pay for inventory until it is sold.

References

• Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.
• Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management.

A Master Production Schedule (MPS) serves as a priority planning tool by:

• Scheduling Production: It details what products need to be produced, in what quantities, and when, ensuring that customer demand is met efficiently.
• Balancing Demand and Supply: The MPS takes into account available capacity, inventory levels, and lead times to balance supply with forecasted demand.
• Resource Allocation: It helps in planning the use of resources, such as labor, machinery, and materials, ensuring that production processes are optimized.
• Order Management: The MPS provides a timeline for when orders will be fulfilled, helping manage customer expectations and improving service levels.

References

• APICS, "Basics of Supply Chain Management"
• "Manufacturing Planning and Control Systems for Supply Chain Management" by Thomas E. Vollmann, William L. Berry, and D. Clay Whybark