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Seven Eleven Japan

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Assignment/Question #1 7-Eleven’s implied demand uncertainty can be categorized as high, due to the nature of the customer needs and product properties. Customer needs: customer is usually in a hurry making an urgency-buy, he has a low tolerance for response time, requires high product availability & high service level. The range of quantity demanded can also be high due to unexpected events, for example a nearby baseball game increasing the demand for beer and chips. These customer needs causes a high implied demand uncertainty. Products properties: middle range of products (3000SKUs); 60% of total sales at each store are processed and fast foods; 50% changes in the course of a year due to seasonal demand & new products; local preferences are important and vary; different consumption patterns throughout the day; stores have limited shelf space and little buffer inventory (limited store size). 7-eleven supply uncertainty is medium to high. Supply uncertainty is increased due to: high diversity of products, perishable products (e.g. frozen and dairy products), the rate of innovative/number of new products, possible delivery delays due to dense traffic around stores as well as possible low yields further upstream the supply chain (2nd, 3rd tier suppliers of raw materials e.g. rice). All these attributes call for a responsive supply chain. Assignment/Question #2 7-Eleven has a high degree of responsiveness, due to the high implied demand uncertainty and medium-high supply uncertainty. It is very crucial for their supply chain ability to respond to wide ranges of quantities demanded, meet short lead times, handle a large variety of products, meet a very high service level and handle supply uncertainty due to the customer needs mentioned above. Additionally they are innovative in the sense that they introduce constantly new products, as well as new services, to attract...

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