SCOM 374 Lecture Notes - Lecture 2: Customer Experience
18 Sep 2018
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Document Summary
Chapter 4: designing distribution networks and applications to online sales. Takes up to 35% of product cost. Having an efficient distribution network allows to cut cost. Performance evaluated based on: value provided to cx, cost of meeting cx needs. Performance measures: response time, product variety, prod. Avail: cx experience, t to mark, ord. visibility, returnability. *we do not need to excel in all the performance measures. For e. g, a cx buying a book online will value variety ore than delivery time more than if he would be buying in a store. Desired response time decreases required number of facilities increases: e. g walmart: they want to decrease their response time, therefore they open multiple facilities. Inventory costs incr: when there are a small amount of facilities, the inbound costs are lower as there is economies of scale. As number of facilities increase, inbound costs are higher as economies of scale decrease.
