How should the new bhl product line be configured

Assignment Help Supply Chain Management
Reference no: EM13880157

The pre-released case study examination is designed to assess your ability to apply the relevant theories, principles and techniques associated with the unit content to a realistic business situation.

This is a case study that will be answered in an exam as open exam and questions will be available during the exam. please make relevant questions and answers that can be possible ones

You will be expected to demonstrate your knowledge and understanding of relevant theoretical principles, concepts and techniques; to apply these appropriately to the particular situation described in the case study and; above all, to make sound decisions. You will not gain marks by writing a general essay on the topic. Prepared notes may not be included as part of the answer.

CATERPILLAR CASE

Caterpillar is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company is also a service provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services and Progress Rail Services. Caterpillar operates in North America, Asia Pacific, Europe, Africa, the Middle East, the Commonwealth of Independent States (CIS), and Latin America.

Caterpillar's BCP division saw great potential for a rationalisation of its BHL product line. But there were three crucial questions that needed to be answered before such a new strategy could be devised and implemented:

1. How would customers react to a product line reduction? Answering this question required an understanding of how customers value different machines.

2. How much could be saved by rationalising the BHL product lines? Answering this question required an understanding of the cost of complexity.

The answers to these two questions could help Caterpillar answer the ultimate question:

3. How should the new BHL product line be configured? Specifically, which machines should be offered and at what prices?

Ultimately, logistics questions within the supply chain centred on which of the following two alternatives would prove to be less costly:

1. North American production: Incur the higher costs associated with shipping finished exoloaders to customers/dealers in the emerging Asian and South American markets and reduce the costs associated with acquiring and coordinating the raw materials and component parts used in production; or

2. Asian production: Incur the higher costs associated with acquiring and coordinating the raw materials and component parts used in production and reduce the costs associated with shipping finished exoloaders.

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Reference no: EM13880157

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