Question

Supply chain network design decisions classified as facility role are concerned with what aspects, and how do they contribute to the overall supply chain strategy?

Answer 1

Facility role decisions in supply chain network design involve optimizing the location, capacity, sourcing, and relationships within the supply chain network. These decisions contribute to the overall supply chain strategy by enhancing efficiency, cost-effectiveness, and responsiveness.

Step-by-step explanation:

Supply chain network design decisions classified as facility role are concerned with aspects related to the connections a company has with suppliers, equipment, and facilities. These decisions contribute to the overall supply chain strategy by optimizing the location and capacity of facilities, determining the sourcing and procurement strategy, and establishing the relationships within the supply chain network.

Facility role decisions include:

1. Location: Choosing the appropriate locations for facilities to minimize transportation costs and reduce lead time.
2. Capacity: Determining the capacity levels for each facility to meet demand while considering factors such as economies of scale and flexibility.
3. Sourcing and procurement: Deciding on the sourcing strategy for raw materials, components, and finished goods, and establishing relationships with suppliers.
4. Network relationships: Establishing and managing relationships with suppliers, distributors, and other partners within the supply chain network.

These decisions directly impact the efficiency, cost, and responsiveness of the supply chain, and ultimately contribute to achieving the overall supply chain goals and objectives.