Discuss the advantages and disadvantages of quick response

What will be an ideal response?

Answer: There are three important consequences of being able to place a second order in the season.
1. The expected total quantity ordered during the season with two orders is less than that with a single order for the same cycle service level. In other words, it is possible to provide the same level of product availability to the customer with less inventory if a second follow-up order is allowed in the sales season.
2. The average overstock to be disposed of at the end of the sales season is less if two orders are allowed.
3. The profits are higher when a second order is allowed during the sales season.

In other words, as the total quantity for the season is broken up into multiple smaller orders, the buyer is better able to match supply and demand and increase profitability. If quick response allows multiple orders in the season, profits increase and the overstock quantity decreases.

Quick response is clearly advantageous to a retailer in the supply chain, ?with one caveat. As the manufacturer reduces replenishment lead times, allowing for a second order, we have seen that the retailer's order size drops. In effect, the manufacturer sells less to the retailer. Thus, quick response results in the manufacturer making a lower profit in the short term if all else is unchanged. This is an important point to consider, because decreasing replenishment lead times requires tremendous effort from the manufacturer, yet seems to benefit the retailer at the expense of the manufacturer. The benefits resulting from quick response should be shared appropriately across the supply chain.