Question

(a) What do we mean by a “postponement strategy”? Why can it be an effective strategy for a firm engaging mass customization? (b) Since the 2008 global financial crisis, the B/L (“bill of lading”) of container shipments from Asian factories to the United States (US) has increasingly specified US gateway ports, rather than the local RDCs (regional distribution centers) of final markets, as the stopping points (as opposed to through points). What are the main reasons behind this development, and why? (c) Following part (b), should the phenomenon happen more often for high-value products or for low-value products? Explain your answer.

Answer 1

Answer a=  “postponement strategy” can be defined as the business strategy in which the business decided to hold on the current investment in order to maximize the current business opportunities and to minimize the possible risks. In case of the companies those are involved in mass customization, “postponement strategy” can be quite handy as first of all they have to wait for the consumption of the current inventory before producing ore products to avoid the unnecessary production and wastage of resources and funds in case the products are not sold out or desired by the customers. The company can again start production once the inventory level reduces and demand is still there for the products.

Answer b= BOL can be seen as the legal document that is being issued to a shipment company by the carrier that includes the various details about the product. The main reason for the BOL to be collected at the gateway ports is that these BOL are received at the port first as this is the point where the products are received in the country and from there these products are sent to inland RDCs. The products have to pay the customs duties and pass the varous formalities.

Answer c= This phenomenon should be associated with ore of the high price products as there will be ore costs associated with the high price products thn the low proce pridcts. Greater custom duties and other levies result sin greater cost