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MG10. Original work only, APA format only. Please do your very best work only using info from the textbook info provided below (:
1. Read Case 2 from “Part 5: Buying Local Cuts Costs for Wal-Mart” on pages 339-340, and answer the questions below in essay format. 2. Your essay must include an introduction, body, and conclusion, and it must address all relevant parts of each question. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number. Essay Questions a. The case discusses several advantages for retailers who use local produce suppliers. Based on your understanding of logistics from Chapter 15, what disadvantages do you see for the retailers? Consider the cash flow needs of small produce suppliers in your response b. Do you see any problems with the varying definitions of “local”? Which definition would you choose and why?
Expert Answer
Answer: (a) There are a number of disadvantages of hiring the local suppliers in the supply chains for the retailers like Wal-Mart. Firstly, these suppliers are small businesses and they are unable to create financial efficiencies in their operations like getting economies of scale and managing their cash flow efficiently. Because of these issues at times these suppliers need to be paid a higher price. The cash flow is an issue with these suppliers and they cannot extend credits to the retailers like the big suppliers. At times cash purchases need to be made to such suppliers’ .They need to be paid at a higher frequency as compared to the big suppliers. This results in financial issues in the supply chain for the retailers. Apart from this there are several other issues also associated with the local suppliers like their high dependency on the retailers, resistance to change and policy related issues.
(b) Yes I see problems with the varying definitions of the term local as they create confusion in creating supply chain policies for decision making. I find the definition of “grown at less than 8 hours drive” as the most suitable as it can help the retailers to actually get fresh supplies with less need for storage, refrigeration and inventory management.
