Question

Put True or False

1. Customs inspection helps in decreasing the SC risks.
2. The vulnerability at the SC may arise from the customers.
3. The product life cycle may have a direct effect on demand-side vulnerability.
4. Using Pareto analysis help in SC risk identification

Answer 1

1) True, custom inspection helps in mitigating the process risk involved in supply chain thereby checking the level of inventory intended to be supplied.

2) True, the vulnerability arising from customers usually arise from the demand side in the form of forecasting risk which ascertain the difference between the forecasted demand and actual demand due to change in customers tastes and preferences, thus, changing the product mix and supply chain management based on demand from a particular geography and the product mix expected by them.

3) True, the various stages involved in the product life cycle that is market development, market growth, market maturity and market decline. Thus, these stages help in assessing the existence and growth off product in the market with the level of demand. In first stage, when product is introduced in the market, demand is unknown, sales is low and a lot of efforts need to be put in terms of marketing to help in product acceptance. In the second stage, the marketing efforts reap its results in the form of growing sales and Hugh demand. The third stage of market maturity is characterised by the levelling off of growth along with decreased level of growth in sales with market demand tend to be staging. In the final stage of market decline, the sales start to decline due to over saturation and satisfaction of customer's demand along with changing taste and preferences, thus in need of new and innovative product.

4) True, Pareto analysis is an effective technique used in making supply chain more efficient by taking into account three aspects:

- Improving supply delivery schedule adherence by focusing on good suppliers and eradicating reasons for delayed delivery.

- applying Inventory management control through ABC analysis

- Cost saving initiatives in form of cutting down the cost of inventory looking at the demand levels, thus making the supply of goods and accounting of them easier.