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Complete 2 page APA formatted essay: ECO201: Microeconomics-Mod 4 CBT.at least two advantages and disadvantages of SCM over the traditional CPP prior to discussing how SCM modify some economic ideas t
Complete 2 page APA formatted essay: ECO201: Microeconomics-Mod 4 CBT.
at least two advantages and disadvantages of SCM over the traditional CPP prior to discussing how SCM modify some economic ideas tackled in module 1.
First Advantage: Supply chain management (SCM) is very much focused on the process of planning, implementing, and controlling the company’s supply based on the projected demand as dictated by the average weekly sales per item. advanced purchase orders. and a maximum of 10% allowance for emergency cases – a.k.
a. DCM. Through SCM, the company can avoid over purchasing unnecessary raw materials and other equipments. Therefore, the company will be able to maintain a positive operational cash flow and higher profitability at all times.
CPP is used in keeping the prices of raw materials down but there is a risk that the winning bidder had intentionally dropped down the prices way below the break-even point just to win the business contract. In the end, winning supplier may not be able to deliver the needed raw materials due to negative profit attached with the contract. Thus, operational efficiency of the company that purchased the raw materials suffers.
Second Advantage: With SCM, purchasers can strictly focus on the quality of raw materials supplied to them by the qualified suppliers. The problem with CPP, some qualified suppliers may be forced to downgrade the quality of raw materials purchased from them just to compensate with the low prices attached with the contract.
First Disadvantage: A centralized SCM may slow down the purchasing process of needed raw materials since all purchasing will undergo a single department. This could create a bottleneck in the company’s operational activities. In the case of CPP, it is possible for suppliers to be given advanced purchased order to enable the supplier to get ready with the needed raw materials. Thus, it will make it easier for the purchaser to make an early schedule based on the company’s operational requirement for each week.
Second Disadvantage: In line with
