1) A convenience store chain can be responsive and provide customers what they need, when they need it, where they need it. What are some different ways that a convenient store supply chain can be responsive? What are some risks in each case?
¢Increasing Location Build several stores within the same geographical area with minimum distance apart from one another to gain the accessibility by customers. Risk: Having too many stores close to one another can have cannibalizing effect on the stores.
¢Rapid Replenishment Supply the stores with what customers need when they need it. It also enables the stores to have low levels of inventory. Risk: Having too frequent replenishment of products to different locations will increase the cost of transportation.
¢Increasing Inventory Offer the customers with greater varieties and quantities of products at all the stores to suit their preferences. Risk: Having greater varieties of products will cause low level of error in forecasting demand and consequently increase wastage, if any; having high level of inventory will increase the holding cost and make the stores less efficient.
¢Extensive Use of Information System Help the store managers to forecast the demand with greater accuracy to better satisfy the needs of customers. Risk: Having the entire supply chain heavily dependent on the information system will cause the operation going haywire in the case of network failure.
¢Increasing Capacity Expand the space of the stores to better facilitate the store activities and handle the fluctuation of demand. Risk: Having bigger space will result in poorer utilization of resources and higher holding cost for each product when demand is low.