The impact of supply chain cost on the price of the final product.

The impact of supply chain cost on the price of the final product.

Question 1

The distribution network of a company affects its supply chain and the cost of transportation that is incurred. A distribution network is associated with scheduling and the route used to get the products of a company in a specific area where the customers can access them (Tavana et al. 95). When a company designs its transportation network strategically, the supply chain attains the expected degree of responsiveness and consequently decreases the transportation cost The impact of supply chain cost on the price of the final product

The central competitive strategy of Walmart is providing its clients with prime products and services at the minimum cost viable, a strategy that has made the company the most significant retail organization in terms of revenue in the world. To maintain its customer base, Walmart uses a cross-docking strategy to ensure that products are supplied to the various stores to meet the demand and ensure customer satisfaction. In this logistics technique, Walmart has divided its stores based on their region and developed a DC for every region. Suppliers of Walmart send their shipments to the warehouses where they are repacked before being distributed to the retail stores that the DC serves The impact of supply chain cost on the price of the final product Walmart uses this method because it reduces the inventory level by ensuring that all the products are stored in the retail stores and not in the warehouses. A fast, reliable transportation network is required to ensure that the products are in the retail stores at any given time. For Walmart to reduce the transportation costs incurred, the cross-docking logistics technique can select the short routes that their trucks can use when distributing the products to the stores, as noted by Wang et al. (101). Additionally, the management can develop a schedule that ensures distribution is ongoing at all times. Using these strategies, DC serving various stores can reduce transportation costs substantially The impact of supply chain cost on the price of the final product

Question 2

Profitability is the main reason most businesses are started. To remain competitive, companies devise ways to attract more customers and gain their loyalty by using specific aspects such as the quality of products and services produced as well as the prices. A home-delivery company can use rate to increase its profitability. Notably, a home-delivery company charges a certain amount of money for its delivery services. When this price increase, profitability decreases by a particular percentage. In contracts, when the prices fall, profitability increases (De Toni et al. 124). Customers are always concerned about the prices of goods and services. Some may prefer to go out and get the goods instead of paying the delivery fee because they are sensitive to the prices. With a decrease in the charges of delivering goods to the homes of the clients, a home-delivery company can increase its profits since people will order more and pay less for delivery. Prices are a strategic way to increase profits since demand increases when prices lower and subsequently decrease when prices hike The impact of supply chain cost on the price of the final product

Works Cited

De Toni, Deonir, et al. "Pricing strategies and levels and their impact on corporate profitability." Revista de Administração (São Paulo) 52.2 (2017): 120-133.

Tavana, Madjid, et al. "Drone shipping versus truck delivery in a cross-docking system with multiple fleets and products." Expert systems with applications 72 (2017): 93-107.

Wang, Gang, et al. "Big data analytics in logistics and supply chain management: Certain investigations for research and applications." International Journal of Production Economics 176 (2016): 98-110.