Scenario 1.3 A Recent Meeting of the Council of Supply Chain Management

Multiple Choice

Scenario 1.3
A recent meeting of the Council of Supply Chain Management Professionals featured an executive from Dell, which is known for its ability to customize computers to customers' needs as well as their ability to provide quality products at economical prices through their retail channel. The executive discussed the capabilities of their firm regarding the ability to produce products that are "built-to-order" and noted that recent customer insight showed customers were less willing to wait 7 to 10 days to receive their computer even though it was built to their specifications. As a result of this customer trend, Dell began forging relationships with retailers such as Walmart to provide a limited number of computer models in the retailers' stores. In order to fulfill the orders to Walmart, Dell was required to make changes in their production and manufacturing such as holding more products in inventory and utilizing different modes of transportation. For example, Dell was able to shift from a focus on air transportation to over-the-road trucking, which enabled them to cut costs in some areas. As Dell shifted from a "build-to-order" manufacturer to a "make-to-stock" manufacturer, they also had to make investments in customer analytics to identify customer needs as well as collect insight regarding pricing. This customer insight was especially important to the retail partners like Walmart who require their vendors to justify product stock decisions and provide proof that retail inventory will sell at the projected price points. Dell's ability to modify their business model by forging relationships with retailers such as Walmart as well as customer insights has helped the company achieve its revenue and profitability goals.
Refer to Scenario 1.3. Which environmental factor is exemplified by the customer trend that consumers were no longer willing to wait 7 to 10 days for a "build-to-order" computer and led Dell to modify their business model to become a "make-to-stock" manufacturer?

A) Economic
B) Competitive
C) Legal and regulatory
D) Sociocultural