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Value Chain Model - Assignment Example

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The present assignment "Value Chain Model" on the logistics concepts. According to the text, the value chain consists of five primary activities and four support activities. This concept is based on the fact that each and every step adds value to a product…
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Value Chain Model
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Extract of sample "Value Chain Model"

Download file to see previous pages The company aims at increasing its profit margins by reducing the overhead manufacturing costs. This is because the price of labor and materials are fixed according to the market rates. The company believes that by reducing the throughput time it can increase its profit margins.
The productions in the company’s Yorkshire plant has a production cycle that is of three months. Approximately seventy-five percent of the production cost is of materials. The company uses technologies like bar codes and other advanced operating systems in order to reduce the production time. The throughput time for the company’s operations is as follows.
H-T, unlike its competitors, has included retail dealers in its supply chain and distribution models. This strategy has its advantages as the customers get better after sales service as compared to its competitors. The disadvantage is that the profit margin of the company gets reduced as the supply chain becomes longer. Another disadvantage is that the company has a policy of giving dealers a discount on the products that are not sold after a fixed duration. This often serves as an incentive to the dealers as they intentionally keep an inventory of their products. This often erodes the company’s profit margins.
The company provides it’s after sales service through its dealer network. The dealers provide door to door customer service to the customers. This serves as one of the USP of the company as all its competitors have eliminated the dealers from their supply chain and have a customer service cell which has limited reach.
The company has a good production and supply chain infrastructure and has assets worth 81,480 Pounds as of 2007. The current assets of the firm range up to 40780 pounds as of 2007.  ...Download file to see next pages Read More
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