MIS 3534 – Prof. Min-Seok Pang

Online discussion questions – Oct 24

  • If you are running a manufacturing company, when/why would you let outside vendors (e.g. UPS, Fedex) handle logistics and delivery to customers?
  • When would you keep delivery/logistics in-house and let your own employees do it?
  • What can you explain about information asymmetry and conflicts of interests in any other contractual relationship that you can think of?
  • What kind of “homework” or research would be needed in selecting an IT outsourcing vendor?
  • What would happen if you did not do enough homework in finding a mechanic, a contractor, or a doctor?
  • How should IVK choose a new vendor among VerxaWeb, ServoLith, and HiOSoft?

9 Responses to Online discussion questions – Oct 24

  • If you were running a manufacturing company you might want to use outside vendors to handle logistics and delivery to customers for a couple of reasons. First of all, a manufacturing company is not likely to be nearly as good at logistics and shipping as a company like Fedex is. Fedex or UPS would likely be able to provide faster and more reliable delivery which will keep customers from getting disgruntled at long wait times. Second, use of an external vendor for shipping and logistics is usually going to be much cheaper than investing in an in house system. You would have to purchase trucks, hire drivers, develop and IT system to support logistics, and insure everything. The cost of using an external vendor is probably much less than all of this and will allow the manufacturing company to focus on their products.

    You might choose to keep things in house in a situation where you don’t have to do a lot of logistics and delivery activities. If your company doesn’t do a lot of these activities and they are very low risk and easy it would not be worth contracting an external vendor to do something that your own existing employees could easily handle. For example if all you need is 1 van or truck, its probably cheaper to keep things in house versus going through the process of contracting a 3rd party.

  • If you are running a manufacturing company, when/why would you let outside vendors (e.g. UPS, Fedex) handle logistics and delivery to customers?
    – You would want to let outside vendors such as UPS, FedEx, USPS handle logistics and delivery to customers because it tends to be cheaper and more efficient especially in the retail industry. For example: If I am a sneaker retail company such as footlocker, you will be able to get a business account with USPS. This allows you to get shipping costs lower than the average person, and also give you the benefits of getting priority mail (efficiency). You will also be able to monitor your shipments as to when and where it got delivered (valuable data), and how much the transactions costs were (for accounting purposes). As far as risk is concerned, mostly every package can be insured for a fraction of the cost. Moreover, UPS, Fedex, and USPS are amongst the top most trusted shipping companies (within the U.S.)

    When would you keep delivery/logistics in-house and let your own employees do it?
    – There are also times where you would want to keep delivery/logistics in house. An example would be if you were a specialized retail company such as home depot, furniture store, high-end antique stores where you are delivering expensive products LOCALLY. This will be cheaper than letting someone else handle it for you (UPS/FedEx). You would also want your own employees to handle to delivery for services including the shipping. Many times when you order a large item, it comes with free installation. Hence, you would need your own people to install it – killing two birds with one stone.

  • If you are a manufacturing company, you would let another company handle the logistics because they already have the experience and research done to give the most efficient and timely delivery.

    If you do not do enough research when finding a mechanic, contractor, or a doctor they might not end up being good. They might give bad service and not be timely with you. It can also lead to them doing the service a second time because it was not good the first time.

  • If you are running a manufacturing company, when/why would you let outside vendors (e.g. UPS, Fedex) handle logistics and delivery to customers?
    – The reason why you would let outside vendors handle logistics and deliveries to customers is because we do not specialize in logistics whereas a company such as UPS and Fedex does. UPS and Fedex specializes in this area therefore they will have more knowledge and efficiency in handling logistics.

    When would you keep delivery/logistics in-house and let your own employees do it?
    – The only reason I would keep delivery/logistics in-house is because if we can do it ourselves and if it is cheaper than having an outside vendor doing it for us.

    What would happen if you did not do enough homework in finding a mechanic, a contractor, or a doctor?
    – If you do not research about finding a mechanic, contractor, or a doctor, you can face getting scammed. A mechanic may charge you more than what you should have paid for a repair. Therefore, researching online about how much a certain cost repair should give you knowledge about how much you should expect to pay for a repair.

  • Vendors such as UPS and Fed Ex have expertise in logistics and are more likely to succeed in it than a manufacturing company. If there is an issue, those vendors will be more likely to know the correct action to take. Their service is also likely to be higher quality overall (time, reliability, etc.)

    If I did not do enough homework to find a mechanic I would expose myself to many issues. I could end up accepting low quality repairs, since I didn’t know what should be done. I could also get ripped off with a bad price. It is important to do research to find out if the mechanic is good as his job, as well as offers a fair price, and provides quality service.

  • What kind of “homework” or research would be needed in selecting an IT outsourcing vendor?
    Some of the homework or research that would be needed in selecting an IT outsourcing vendor can be asking for quotes within different companies. Online research of their programs offered and also asking customer services within the IT outsourcing vendor youre comparing each other with.

    What would happen if you did not do enough homework in finding a mechanic, a contractor, or a doctor?
    If you do not do enough homework will cost you time or money. Sometime time is money. You will lose out in productivity cost because you will have to take time to research for another good doctor or etc. or Also lose on on the money you’ve already inputted for that significant contractor or doctor.

  • If you are running a manufacturing company, when/why would you let outside vendors (e.g. UPS, Fedex) handle logistics and delivery to customers?

    If I was running a manufacturing company, I would let outside venders such as UPS or FedEx handle logistics and delivery because of their expertise. It would be my responsibility to manufacture products and maintain a certain level of quality, but it falls under the outside vendor’s responsibility to effectively deliver my product.

    What would happen if you did not do enough homework in finding a mechanic, a contractor, or a doctor?

    If you don’t do enough homework finding a mechanic, you will not receive good service. Settling for any kind of mechanic could result in overpaying for faulty repairs. It is important to do research so that you receive the right repairs for a fair price.

  • What kind of “homework” or research would be needed in selecting an IT outsourcing vendor?

    First of all, you can look up online reviews for selecting an IT outsourcing Vendors. Also, get recommendations from friends or family. You can ask other business owners about their IT outsourcing vendors. After the research you can compare if the results were met or not or if the vendor met all the expectations that you are interested in. you can also your vendor with other vendors that you did research on.

  • What would happen if you did not do enough homework in finding a mechanic, a contractor, or a doctor?

    If I didn’t do enough homework in finding a mechanic, a contractor, or a doctor than it would definitely affect me. Also, i would end up losing money i invested. Instead of fixing the problem, it might make it worst since i did not do my homework.