Test Papers / Previous Question Papers of IGNOU MS55 Logistics and Supply Chain Management June 2007

MANAGEMENT PROGRAMME
Term-End Examination

June, 2007

MS-55 : LOGISTICS AND SUPPLY CHAIN MANAGEMENT

Time: 3 hours
Maximum Marks: 100
(Weightage 70%)

SECTION A

1. What is Physical Distribution Management (PDM)? Why is PDM considered to be a critical area of overall supply chain management? Discusst he system or 'total' approach to PDM in detail.

2- Define SCM integration and discuss the four stages of Steven's model of supply chain integration. Also, describe the strategies involved in SCM integration.

3. "Many innovations on technology-based approaches are well-suited to the enhancement of the effectiveness of Supply Chain Management"-Justify the statement by giving few applications of information technology in SCM.

4. What is Customer Profitability Analysis? Why has it gained importance in the recent times? Is it ethical to deny a customer who is not profitable?

5. Why is the location of warehouse important for the SCM? Discuss some methods for determining the location of the warehouse

6. What are the essential dlfferences in the Supply Chain Management of Products vs. Services? Discuss the application of Supply Chain Managernent principles in Financial Services.

SECTION B

7 . Read the following case and answer the questions given at the end.

Kozmo, the Online convenience store to shut down

New York-based Kozmo, the 3-year-old company announced that it would stop delivery service in all nine cities it operates. New York-based Kozmo, which dispatched legions of orange-clad deliverymen to cart goods to customers' doors, is the latest dot.com dream to evaporate in the market downturn. Amazon com, venture capital firm Flatiron Partners and coffee giant Starbucks were among the investors in Kozmo.

Kozmo said in December that investors promised a total of $30 million in private funding. But last month the company learned that an investor had backed out of a $6 million commitment. Kozmo executives had been working on a merger deal with Los Angeles-based PDQuick, another online grocer, sources said. The deal collapsed when funding that was promised to PDQuick did not materialize. Sources said Kozmo still has money but decided to close now and liquidate to ensure that employeesc ould receive a severance package.

Just last month, Kozmo Chief Executive Gerry Burdo was upbeat about Kozmo's future, saying he was looking to steer Kozmo away from its Internet-only business model and toward a "clicks and bricks" approach. But some analysts say Kozmo's business model only made sense in the context of a densely packed city such as New York. Vern Keenan, a financial analyst with Keenan Vision, said the service had a chance to work in only a few other cities around the world, such as Lonclon, Stockholm or Paris. "This seemed like a dumb idea from the beginning," Keenan said. "This grew out of a New York City frame of mind and it simply didn't translate."

Kozmo was started by a pair of twenty-something former college roommates. They got the idea for the company on a night when they craved videos and snacks and wished a business existed that would deliver it to them. Kozmo offered free delivery and charged competitive prices when it launched in New York. Though customers loved the service, the costs of delivery were high.

After co-founder and former Chief Executive Joseph park stepped down, Burdo slashed Kozmo's overhead, instituted a delivery fee and oversaw several rounds of layoffs. The company also closed operations in San Diego and Houston. Burdo said last month that profitability was not far away. The company had reached a milestone last December when it reported profits at one of its operations for the first time. Kozmo later saw two more operations reach profitability as a result of brisk holiday business.

Online delivery companies have been among the most ravaged by the Internet shakeout. Kozmo's rival in New York, Urbanfetch, shuttered its consumer operations last fall. Online grocers such as Webvan and Peapod have also struggled, and smaller operations such as Streamline.com and ShopLink.com have dosed down. Peapod was days away from closing last year when Dutch grocer Royal Ahold agreed to take a majority stake.

From the very beginning, supply chain management was to be a core competency of Kozmo. The promising dot.com would deliver your order everything from the latest video to electronics equipment in less than an hour. The technology was superior, the employees were enthusiastict, the customers were satisfied. But eventually, Kozmo ran out of time and money.

Questions:

(a) What, in your opinion, is the major reason for the failure of Kozmo?

(b) Do you think that Kozmo promised what its supply chain could not bear? What could have prevented its shut-down?