Question

Consider Google deciding on how much to order from its manufacturer(s) or supplier(s). What specific costs should it take into account when making this decision?

Also, consumers are expressing increased demand for product customization in the form of features, labeling, color, or packaging. Consider the impact of this trend on supply chain inventory management. Research and discuss how Google can or does mitigate this impact.

Answer 1

While ordering from supplier, the costs which google should consider is

1. Cost per unit , i.e the the cost of 1 unit of an item

2. Transportation cost

3. Defective cost, i.e if the items are defective what would be the cost attached

4 Quantity discounts ( Lot size and cost attached to it)

If there are lot of customizations in the product, there are chances of increases inventory in the supply chain because of too many products, also the suppliers might not be in the capacity to deliver such customizations.

To mitigate this impact postponement strategy can be implemented where the final product is delayed as much as possible and inventory is kept in the form of semi finished goods and according to customer demand the end product can be customized accoording to feature .