Skip to content

ACCA Strategic Professional · Strategic Business Leader · E-business: value chain

Marlowe Retail operates a large store chain. It plans to let suppliers access its point-of-sale data and replenish stock automatically, with suppliers owning the inventory until sold. The CEO says this will move it from a push to a pull supply chain. A consultant is asked to assess the claim. Which statement is most accurate?

The claim is right. Replenishment triggered by actual point-of-sale data is demand-driven, which is a pull approach, and supplier-owned inventory until sale shifts holding costs and obsolescence risk upstream. Physical stores and use of electronic data interchange do not prevent a pull system.

  1. AThe claim is wrong, because sharing sales data keeps the chain push-based since suppliers decide quantities
  2. BThe claim is right only if the retailer stops selling through physical stores
  3. CThe claim is right, because replenishment is triggered by actual sales rather than forecasts, and supplier-owned inventory shifts holding cost and risk upstreamCorrect
  4. DThe claim is wrong, because pull systems cannot use electronic data interchange

Explanation

Pull supply chains are triggered by actual demand. Using point-of-sale data to trigger replenishment achieves this, while vendor-managed, consignment-style stock moves holding costs and obsolescence risk to suppliers. Store format is irrelevant and pull systems readily use EDI.

Did you get it right without looking?

One question tells you little. A timed set on E-business: value chain shows your real accuracy, how long you take and where you lose marks.

Practise E-business: value chainFree diagnostic mock

More E-business: value chain questions