1. The worlds largest retailer, Walmart, owns and manages its own fleet of trucks. The company has often received praise for its distribution capabilities. The practice, however, seems to represent a stark contrast to the practice of outsourcing not only shipping, but other logistics operations to third-party logistics providers. You need to address the advantages and disadvantages of these different policies. Under what conditions would it make sense for a firm to own and manage its own trucking operation?

2. Multi-facility companies must decide whether to purchase goods centrally or let each site purchase on its own. Please identify the advantages and disadvantages of centralized purchasing. Some advantages include: (1) more ability to obtain quantity discounts, (2) reduced duplication of effort, (3) economies of scale in purchasing activities, and (4) potential risk- pooling benefits. Some disadvantages include: (1) potential extra material handling, (2) potential longer lead times, (3) local site needs being ignored, and (4) loss of control for local managers who are judged on profit or cost.

OPERATIONS & SUPPLY CHAIN MGT