Question1.Why did gateway choose not to carry any finished product inventory at itsretail stress? Why did apple choose to carry inventory at its stores?Answer: Gateway applied a strategy to avoid carryingfinished goods inventory in retail stores.
By this way customers had chance to customize the configurationsaccording to their mean of work. Moreover there was also opportunity to try anysample product with in the store. By this strategy gateway had an aim to designa supply chain design that would match this demand.The decision of gatewaynot to carry finished goods inventory at retails stores are related to thesefactorsAllow more flexibilityin product configuration.
This flexibility would allow gateway to managecustomer’s demand, since the final product would only be configured aftercustomers order. This would also allow the company to imply a CustomerRelationship Management strategy, since the company would know the specifics ofcustomer’s needs and would be able to target customer for future products.On the other hand,apple had aimed to fulfill the customer demand immediately and with provide theexperience of finished product to customer. There is low shipment cost, becausebundle of product shipped to retails stores and customers can pick from these stores.Question2. Shoulda firm with an investment in retail stores carry any finished goods inventory? Whatcharacteristics of products those are most suitable to be carried in finished goodsinventory? What characteristics products those are best manufactured to order? Answer: The decision should be based on customer preferencesand on delivery times and costs. If customers prefer online shopping, then thereno need to carry finished goods at a retail store. If the delivery time withrespect to the customer’s needs is deemed to be high (groceries), then there isa need to have finished goods inventory.
On the other hand, if the deliverytime is reasonable/acceptable (e.g. furniture), then the company could dowithout having finished goods inventory.
Characteristics of product to carried in finishedgoods inventory• Lowinventory cost products• Productswith extra inventory life• Products for less waiting time (groceries)• High demand product in market Characteristics products that best manufactures toorder• Low inventory life• High cost inventory products• Low demand product in market• Products for which customer can wait• Products with certain demands. Question3. How doesproduct variety affect level of inventory a retail store must carry?Answer: thevariety of product related with inventory cost and also varies with physicalinventory at store for each and individual product.
Higher variety of products implies that more products have to be keeping at the store and subsequently, the amount of each product will besmaller. With high product variety the products and quantities put away at the store have to be exceptionally carefully. Otherwisethere will be risk of low level inventory and low sales.Question4.Isthe direct selling supply chain without retail stores always less expensivethan a supply chain with retail store?Answer:yes the direct selling supply chain without retail is less expensive.
Because itsaves the cost of retail store operation. Shipping cost is also less in thischannel. It avoids the infrastructure cost between two configurations. This isalso easy to handle return policy between two configurations. Question5.
What factors explain the success of Appleretail and the failure of Gateway country stores? Answer: The customer experience that Apple has beenproviding is an important factor of differentiation in contrast Gateway was notproviding such a level of customer service and experience. Delivery time wasanother significant factor that helped Apple, since the customer was able toget the product while at the store, gateway also fail to deliver product tocustomer in short delivery time. Eventually Apple was the only retailer of theirproducts, that guaranteed excellent service across the board.