Fresh Connection Game PDF
Fresh Connection Game PDF
Fresh Connection Game PDF
Supply
chain
Management
The
Fresh
connection
game
analysis
The
fresh
connection
game
that
was
taking
place
at
the
University
of
Huddersfield
gives
to
the
Logistics
student
a
real
vision
of
what
logistics
operation
can
be
in
a
simulation
game.
As
David
Leach
stated:
The
Fresh
Connection
has
been
a
really
valuable
addition
to
our
final
year
programme,
enabling
students
to
experiment
with
supply
chain
theory
and
techniques
developed
during
their
studies.
This
report
will
be
an
analysis
of
the
strategic
management
undertake
by
the
hudd
-
Team
28
that
has
been
participating
the
game.
Purchasing
Director,
in
charge
of
the
supplier
selection
regarding
to
lead
time
and
Supply
chain
requirement
Supply
Chain
Director,
in
charge
of
planning
and
logistics
decision
regarding
forecasting
Operation
Director,
in
charge
of
warehouse
management
and
bottling
and
mixing
line
of
production
Sales
Director,
in
charge
for
customer
contract
and
demand
forecasting
The
selection
of
strategy
was
the
responsibility
of
the
CEO
in
charge
of
the
coordination
between
the
different
services
in
order
to
achieve
a
positive
return
on
Investment.
The
report
will
review
the
strategy
of
the
team
and
the
implication
with
the
competitive
environment.
It
will
also
deal
with
a
financial
analysis
based
on
theory
and
effective
choice
taken
by
the
team,
explaining
the
reason
and
the
possible
improvement
that
lead
to
the
final
round
position
and
finally
explain
in
which
extent
the
final
round
decision
could
be
improved
to
sustain
and
achieve
a
higher
performance
ratio.
Contents
Executive
summary
................................................................................................................................
1
Introduction
...........................................................................................................................................
3
A)
Team
strategy
alignments
with
competitive
strategy
...................................................................
4
a)
Main
strategy
.............................................................................................................................
4
1)
Efficient
strategic
management
process
...............................................................................
4
2)
Responsive
strategic
management
process
..............................................................................
5
b)
Supply
chain
Strategy
within
the
Game
.....................................................................................
5
B)
Final
Round
analysis:
effect
of
supply
chain
strategy
on
financial
performance
...........................
7
a)
Analyse
of
the
financial
statement
............................................................................................
7
b)
Effect
on
the
financial
statement
..............................................................................................
9
C)
Sustainable
improvement
and
recommendation
........................................................................
13
a)
How
to
sustain
a
high
level
of
efficiency?
................................................................................
14
b)
Long
term
strategy
to
achieve
best
in
class
performance
.......................................................
16
Conclusion
...........................................................................................................................................
17
Bibliography
.........................................................................................................................................
18
2
Introduction
Strategic
management
within
a
logistics
and
supply
chain
management
company
has
to
deal
with
several
component
of
the
supply
chain.
Supply
chain
management
is
the
management
that
takes
place
within
the
supply
chain
with
the
aim
to
link
all
of
the
chain
link
that
composes
the
supply
chain.
From
the
purchasing
activities
to
the
sales
going
through
the
operations
and
the
supply
chain,
several
strategies
could
have
been
undertaken.
The
CEO
of
the
company
has
to
take
decision
regarding
what
to
focus
on
(based
on
forecasting
and
demand)
and
to
whom
(selection
of
customer
by
priority
or
delivery
organized
to
every
customer
without
any
regards
to
their
demand)
and
also
through
paying
attention
to
put
together
all
the
information
given
by
the
different
departments.
Supply
Purchasing
Operabons
Sales
chain
The
above
process
scheme
is
showing
the
interconnectivity
between
the
different
departments
within
the
supply
chain.
The
communication
process
between
the
different
entities
is
one
of
the
capital
issues
that
company
have
to
faces.
Within
the
fresh
connection
games,
the
aim
of
the
strategy
was
to
improve
the
return
on
investment
of
the
company
by
applying
two
types
of
strategy
based
on
two
types
of
characteristic:
efficiency,
flexibility.
According
to
Fisher,
the
two
types
of
strategy
that
are
used
within
the
supply
chain
management
have
different
uses
that
can
correspond
to
different
types
of
product.
With
a
difference
in
terms
of
product
life
cycle
between
the
Functional
and
the
innovative
products
from
3
months
to
a
year
for
the
innovative
product
to
more
than
2
years
for
the
functional
product.
In
the
fresh
connection
game,
the
products
were
perishable
so
identify
into
the
innovative
product
section.
3
A) Team
strategy
alignments
with
competitive
strategy
a) Main
strategy
According
to
Ballou,
Supply
chain
strategy
has
three
objectives
to
realise
from
cost
reduction
to
capital
reduction
through
service
improvement
(Ballou,
2004).
During
the
Fresh
Connection
Game,
two
type
of
strategy
could
be
undertaken
to
reach
these
objectives.
According
to
the
demand
scope,
the
supply
chain
can
be
drive
through
either
a
cost
or
time
oriented
strategy.
According
to
Porter,
competitive
advantage
is
a
core
point
of
competitive
strategy
(Porter,
1998),
where
it
could
be
reach
through
cost
leadership
position
or
differentiation
position
within
the
market.
The
strategy
based
on
efficiency
was
linked
to
the
direct
costs
(purchasing
and
production
costs)
that
could
affect
the
market.
The
lower
the
direct
costs,
the
higher
the
efficiency
scores
(The
fresh
connection
game,
2012).
According
to
Fisher,
the
efficiency
strategy
can
also
be
called
the
lean
supply
strategy
where
the
reduction
of
waste
lead
to
the
reduction
of
costs.
The
aim
of
this
strategy
is
to
make
sure
that
the
value
created
and
the
cost
are
minimised
via
the
elimination
of
waste
(Jonsson,
2008).
An
efficient
supply
chain
is
distinguished
by
longer
production
lead-times,
high
set-up
costs,
and
larger
batch
sizes
that
allow
the
efficient
firm
to
produce
at
a
low
unit
cost.
(Taylor
R.
Randall,
2003)
The
efficiency,
if
it
is
the
target,
that
the
company
try
to
reach
has
to
implement
several
leverage
to
influence
the
different
department
of
the
supply
chain
to
get
in
touch
with
each
other
in
order
to
create
several
connection
that
will
enable
the
company
to
make
cost
reduction.
This
cost
reduction
could
have
several
faces,
from
shelf
life
reduction,
to
the
reduction
of
permanent
employees
or
via
a
better
selection
of
the
supplier
and
lead
to
implement
an
efficient
supply
chain
strategy.
The
principal
aim
of
an
efficient
supply
chain
management
have
also
to
deal
with
continuous
replenishment
to
make
sure
that
the
order
could
be
fulfill
without
falling
into
storage
disruption
(Christopher,
2004).
In
the
case
of
efficient
supply
chain
management
the
competitive
advantage
can
only
be
translated
as
a
value
advantage
where
the
company
is
not
necessary
seeking
for
a
high
productivity
advantage
but
foe
a
high
level
of
service
that
will
help
to
earn
the
customer
loyalty,
and
then
set
up
a
long-term
partnership.
4
According
to
Fisher,
the
two
types
of
strategy
that
are
used
within
the
supply
chain
management
have
different
uses
that
can
correspond
to
different
types
of
product.
(Fisher, 1997)
The
product
life
cycle
does
have
an
impact
on
the
demand
that
customer
makes.
To
answer
this
demand
the
efficient
supply
chain
management
strategy
does
anything
to
maximise
the
reliability
of
the
delivery
to
ensure
a
long
term
partnership.
While
on
the
other
side
the
responsive
strategic
management
is
trying
to
achieve
a
high
level
of
reliability
through
an
adaptable
supply
chain
and
the
reduction
of
stock
out.
On
the
other
side
the
strategy
based
on
responsiveness,
that
have
clear
goals
which
are
applied
the
main
principle
of
the
logistics.
The
Goal
of
Responsive
supply
chain
strategy
is
to
deliver
to
the
customer
what
they
want,
when
they
want
it
and
at
the
right
price.
This
strategy
helps
to
build
a
strong
customer
loyalty
offering
a
high
level
of
reliability
at
any
time.
A
responsive
supply
chain
is
distinguished
by
short
production
lead-times,
low
set-up
costs,
and
small
batch
sizes
that
allow
the
responsive
firm
to
adapt
quickly
to
market
demand,
but
often
at
a
higher
unit
cost.
(Taylor
R.
Randall,
2003)
According
to
many
strategic
management
studies,
the
responsive
strategic
management
has
to
set
up
it
functioning
according
to
the
forecasting
to
match
customers
needs.
The
company
has
to
make
sure
that
product
is
available
at
all
time
to
ensure
that
customer
demand
even
when
the
demand
is
fluctuating,
are
always
met.
The
principal
goal
of
the
Responsive
supply
chain
is
to
ensure
a
quick
response
into
the
logistic
stream.
According
to
Fisher,
this
strategy
has
quicker
reward
when
investing
into
it
because
this
type
of
strategy
has
been
built
to
create
a
high
return
on
investment
through
the
implementation
of
high
level
of
reliability
and
so
on
the
customers
loyalty.
This
responsiveness
enables
the
company
to
set
up
competitive
advantage,
through
strong
customer
focused
management
and
a
capital
reduction
that
can
be
translated
to
the
minimization
of
investment
along
the
supply
chain
and
only
seeking
for
the
reduction
of
stock
cost.
The
responsive
strategy
is
based
on
the
Just
in
time
concept
where
the
customer
demand
are
leading
the
whole
logistics
process
and
help
to
avoid
obsolescence
of
stocks.
The
reduction
of
this
cost
and
the
responsiveness
of
the
company
then
lead
to
service
level
improvement
that
has
for
effect
a
higher
customer
loyalty
(Christopher
&
Peck,
2003)
5
The
aim
of
our
supply
chain
strategy
was
to
reach
the
stage
of
the
integrated
supply
chain
with
the
main
goal
of
achieving
a
high
level
of
efficiency
through
the
reductions
of
costs.
Along
the
Fresh
connection
game,
the
Hudd
Team
28
had
for
goal
to
achieve
an
efficient
supply
chain
strategy
in
order
to
implement
a
long
term
partnership
with
their
customer.
This
strategy
has
been
implemented
along
several
decisions
taken
by
the
CEO
of
the
company
through
the
different
service.
On
the
supply
chain
side,
the
main
goal
was
to
reach
the
lower
level
of
obsolescence
of
the
component
as
well
of
the
finished
product.
Several
issues
rose
from
the
miscommunication
between
the
different
fields
of
operation
during
the
early
round.
However
the
final
difference
between
the
two
last
round
have
shown
that
an
efficient
strategy
could
make
changes
on
the
long
term
basis
,
with
a
difference
of
+18,37%
in
the
ROI.
That
allows
the
team
to
end
up
with
a
positive
result.
Through
the
reduction
of
cost
on
the
different
department
the
team
has
managed
to
reduce
stock
cost
and
handling
cost.
Moving
from
a
cost
reduction
to
capital
reduction
also
act
on
flexible
manpower
and
enables
the
company
to
finish
the
competition
with
a
positive
operating
profit.
Within
the
supply
chain
department,
the
reduction
of
the
stock
cost
and
handling
cost
has
to
be
handled
by
the
safety
stock
management.
The
relationship
between
customer
management
undertaken
by
the
sales
department
and
the
supply
chain
management
affect
the
decision
that
has
to
be
taken
in
order
to
maximise
the
efficiency
of
the
company.
6
B) Final
Round
analysis:
effect
of
supply
chain
strategy
on
financial
performance
A
financial
analysis
is
made
out
to
identify
the
different
area
where
a
company
is
either
profitable
or
efficient.
The
financial
analysis
is
generally
used
to
determine
if
the
company
is
sustaining
for
investments.
Measuring
profitability
and
efficiency
can
be
done
through
various
ratios
calculation
(Ryan,
2008).
2. Ratios analysis:
7
The
following
chart
is
showing
the
ROI
(return
on
investment)
of
the
Hudd
team
28
along
the
6
Round
of
the
game:
ROI
5,00%
0,00%
1
2
3
4
5
6
-5,00%
ROI
-10,00%
-15,00%
-20,00%
In
order
to
implement
an
effective
strategic
management
along
the
supply
chain
the
company
has
to
use
leverage
to
act
on
their
ROI,
this
different
leverage
has
been
evaluated
through
ratios
that
enable
the
company
to
monitor
and
control
it
growth
over
the
game
period.
The
last
round
played
by
the
Team
28
has
been
the
most
profitable.
This
could
be
attributing
to
a
better
management
of
the
different
department
and
an
increase
in
communication
between
the
services.
8
b) Effect
on
the
financial
statement
The
ration
analysis
that
has
been
undertaken
using
the
financial
statement
has
been
separated
between
two
different
areas:
the
profitability
ratios
and
the
efficiency
ratios.
1. Profitability Ratios:
Round 1 2 3 4 5 6
Profitability Ratios
Operation margin / net profit ratio (%) -8.99% -26.38% -22.57% -9.21% -22.82% 0.34%
Grossprofit ratio (%) 40.35% 36.61% 38.31% 37.57% 31.43% 40.32%
Operating ratio (%) 59.65% 63.39% 61.69% 62.43% 68.57% 59.68%
ROI (%) -6.86% -15.92% -15.34% -7.33% -18.03% 0.36%
Financial
ratio
that
has
to
be
calculated
is
linked
to
the
efficiency
of
every
department
that
compose
the
supply
chain,
according
to
the
revenue
they
generated
and
the
cost
they
had
put
in
place
to
maximise
the
revenue
(Atrill
&
McLaney,
2008).
Assessing
the
profitability
through
a
logistics
company
is
dealing
with
several
variables
such
as
customers
expectations,
cost
reduction
and
capital
utilisation.
The
previous
profitability
ratios
show
that
the
return
on
investment
of
the
companies
went
through
a
deep
hole
to
finally
come
out
positive,
showing
that
the
team
has
been
more
profitable
on
the
last
round.
The
principal
goal
of
the
Team
28
has
been
to
achieve
an
efficient
strategy
more
than
a
responsive
strategy
that
will
have
led
to
a
more
profitable
return
on
investment.
Along
the
game
the
strategy
undertaken
was
to
set
up
at
a
minimum
level,
the
production
cost
through
influencing
the
permanent
employee
and
by
using
the
production
line
the
most
effectively
in
all
field
of
area.
Along
the
Supply
chain
department
the
principal
issue
encounter
at
the
first
round
was
a
high
level
of
raw
material
and
finished
product
obsolescence,
which
influence
the
cost
of
goods
sold
and
affected
the
operating
margin.
As
the
profitability
ratio
table
is
showing
the
ROI
has
been
affected
between
round
1
and
round
6
but
the
gross
profit
ratio
reflecting
a
marked
improvement
in
cost
management.
9
The
net
profit
ratio
and
the
ROI
shows
a
utilization
of
the
capital
and
the
revenue
has
been
correlated
to
each
other,
where
investment
affected
the
revenue
in
a
way
that
machinery
and
software
investment
have
been
contributing
to
the
increase
of
revenues.
The
operating
ratio
that
shows
the
cost
of
goods
sold
compare
to
the
revenue
is
creating
value
along
the
supply
chain
by
controlling
the
cost
engaged
into
the
production
and
the
revenues
that
it
creates.
The
gross
margin
profit
represents
the
difference
between
sales
over
the
cost
of
sales,
it
represent
the
real
profit
that
been
made
from
products
sales
after
putting
cost
of
production
away
(Perret,
et
al.,
2007).
80,00%
Protability
Ra/o
60,00%
Operabon
margin
/
net
prot
rabo
(%)
40,00%
Grossprot
rabo
(%)
20,00%
Operabng
rabo
(%)
0,00%
1
2
3
4
5
6
ROI
(%)
-20,00%
-40,00%
2. Efficiency
Ratios:
The
efficiency
ratio
show
that
the
earning
of
the
company
compared
to
the
capital
that
has
been
employed
has
been
for
enhancing
the
utilisation
of
the
supply
chain.
An
enhanced
effectiveness
by
adapting
the
means
of
production
to
demand,
and
a
better
management
of
storage
cost,
but
also
a
better
management
of
sales
and
purchases.
Each
department
within
the
company
can
manage
his
own
efficiency
related
to
the
revenue
(Atrill
&
McLaney,
2008).
The
production
ratio
show
that
production
cost
have
been
enhanced
through
the
different
round
leveraging
on
the
employment
while
the
Stock
ratios
is
showing
an
considerable
improvement
along
the
game
period
regarding
at
the
difference
between
round
1
and
6.
10
The
cost
reduction
has
been
effective
regarding
the
Overflow
raw
materials
warehouse
and
Overflow
finished
goods
warehouse
that
has
been
reduce
by
28%
and
33%.
The
cost
of
scrap
product
has
also
been
improved
with
a
reduction
of
18%.
The
stock
ratio
that
calculate
the
relation
between
stock
cost
and
revenues
show
that
the
control
over
the
supply
chain
management
will
made
the
company
more
effecting
by
influencing
a
reduction
of
cost
and
generating
operational
incomes.
Regarding
the
contract
cost
that
has
been
run
over
the
game
period,
the
improvement
has
been
total
with
a
perfect
management
that
led
to
a
0.00%
over
consecutive
period.
30,00%
Eciency
25,00%
ra/o
Producbon
(%)
20,00%
Distribubon
(%)
Stock(%)
10,00%
Handling(%)
5,00% Contract(%)
0,00%
1
2
3
4
5
6
The
prioritisation
of
customer
has
also
help
to
the
reduction
of
cost
and
taking
more
detail
on
quality
product
expectations.
11
supply chain. Fig. 2 illustrates only the two updated via fur
extreme types of product characteristics; in the the product cha
real-world there is a wide spectrum of products house (2002). Th
withThe
varying degrees of functional and fashionable ing the classificat
supply
chain
management
that
has
been
undertaken
by
the
team
28
has
shown
that
an
characteristics.
efficient
Furthermore,
strategy
is
based
on
these
a
long
term
perspective,
if
the
product
sold
in
the
game
Study
even
characteristics are
short
is that th
life
are
cycle
not
and
a
frozen
responsive
in timewill
because
strategy
as products
be
more
accurate
(Brealey,
et
amature interpretation
l.,
2009).
The
following
table
ag
is
giving
the
position
that
Team
28
has
trying
to
reach
and
it
actual
position:
through their product life cycles the customer at the strategic
many concurren
at the tactical le
Functional Products Innovative Products assigned to their
latter problem w
Efficient paper which is an
Supply Match Mismatch (2001). Special e
Chain impact of the
manufactured ite
The classificat
Responsive initially propose
Supply (2000) following
Chain Mismatch Match
plus their indus
industries. They
of the model ma
Fig. 2. Matching supply chains with product characteristics lise the relevan
(Source: Fisher, 1997). Country in-sourc
12
C) Sustainable
improvement
and
recommendation
According
to
Taylor
R.
Randall,
Ruskin
M.
Morgan,
and
Alysse
R.
Morton
within
a
Journal
of
product
innovation
management,
the
supply
chain
strategy
that
are
seeking
for
competitive
advantage
are
more
likely
entering
the
market
within
an
responsive
based
strategy
to
then
continue
on
the
efficient
model,
to
guarantee
a
competitive
advantage
and
to
set
up
a
loyalty
regarding
customers
to
then
offer
them
efficient
strategy
(Taylor
R.
Randall,
2003).
The
following
scheme
is
showing
the
relation
between
the
supply
chain
leverage
and
their
impact
on
the
ROI
of
a
company:
(Christopher,
2004)
13
a) How
to
sustain
a
high
level
of
efficiency?
Supply
chain
has
to
be
seen
as
a
whole
not
only
as
multiple
part
that
interact
once
in
a
while.
Within
the
supply
chain
management
the
different
services
has
to
monitor
their
activities
to
determine
if
their
sector
is
doing
good.
The
previous
ratios
that
have
been
calculated
in
the
previous
section
help
to
monitor
the
supply
chain
strategy
profitability
and
efficiency
that
led
to
maximise
the
ROI.
The
following
graph
is
showing
the
evolution
of
the
competitiveness
over
the
time:
(Christopher, 2004)
Though
several
strategies
a
company
can
appraise
and
maintain
a
high
level
of
competitive
advantage
amongst
their
competitors.
Benchmarking
which
could
be
defined
as
continuous
improvement
and
measurement
of
the
product
prices
and
process
along
the
supply
chain
is
one
of
the
examples
of
the
supply
chain
management.
Yet,
to
manage
with
an
efficient
supply
chain
the
company
has
to
monitor
their
price
advantage,
product
differentiation
and
price
competitiveness.
The
utilisation
of
ratios
such
as
ratios
linked
to
the
cost
could
be
used
to
sustain
and
enhance
business
in
a
way
that
they
are
able
to
calculate
the
part
of
the
costs
that
is
combusted
into
the
revenue.
However
financial
analysis
has
limit
and
could
only
give
proof
that
the
company
is
doing
well
or
not,
Supply
chain
directors
and
other
member
of
the
company
have
to
find
out
what
the
ratios
are
saying,
they
are
only
consequences
helping
to
find
the
cause.
14
The
implementation
of
agile
or
lean
strategy
will
depend
on
the
nature
of
the
product,
depending
on
the
lead-time
and
on
the
demand
characteristics.
The
Team
28
has
adopted
a
lean
strategy
in
order
to
reduce
to
it
minimum
the
costs
generated
along
the
supply
chain.
Moreover
the
lean
management
strategy,
based
on
the
cost
reduction
process
has
it
limit.
And
the
future
of
the
fresh
fruit
company
will
be
to
transform
it
strategy
into
a
hybrid
strategy
or
an
agile
strategy.
As
comparison
to
Air
transport
market,
improving
the
supply
chain
is
making
the
whole
participant
of
it
working
together
through
dedicated
IT
tools,
through
an
increase
in
communication,
in
order
to
implement
a
high
level
of
responsiveness
while
a
fruit
industry
as
played
during
the
game
should
more
focuses
on
planning
and
optimisation.
15
b) Long
term
strategy
to
achieve
best
in
class
performance
In
order
to
ensure
a
long
term
strategy
that
will
help
to
achieve
best
in
class
performance,
the
team
28
will
have
to
ensure
that
IT
process
has
been
put
in
place
to
reduce
the
miscommunication
that
had
been
happened
along
the
game.
A
plan
of
action
for
future
and
long-term
expansion
along
the
game
would
be
to
implement
continuous
replenishment
along
the
stock
purchasing
methods
that
will
allow
either
the
purchasing
and
the
supply
chain
to
predict
and
respond
to
the
needs
of
the
customer
with
more
accuracy
and
will
establish
between
the
different
service
a
natural
communication
process (Gattorna, 2006).
The
supply
chain
department
will
have
to
rely
on
forecasting
and
purchasing
to
implement
an
accurate
replenishment
of
the
stock
by
working
closer
with
the
operations
in
charge
of
warehousing
spaces
and
could
seek
every
waste
that
could
have
been
made
in
order
to
increase
the
lean
management
accuracy.
The
implementation
of
six
sigma1
strategy
oriented
will
also
lead
to
a
reduction
of
cost
through
waste
elimination
with
a
continuous
improvement
scheme.
1
Six
sigma
is
a
philosophy
of
doing
business
with
a
focus
on
eliminating
defects
through
fundamental
process
knowledge.
Six
sigma
methods
integrate
principles
of
business,
statistics
and
engineering
to
achieve
tangible
results.
(Six
sigma
system,
2012)
16
Conclusion
The
fresh
connection
game
was
an
interesting
and
stimulating
competition
where
each
one
of
the
participants
could
deal
with
the
different
position
within
a
fresh
fruit
company.
Such
simulation
of
management
allows
student
to
be
able
to
see
how
a
company
is
working
in
time
consuming
environment
and
where
able
to
organise
themselves
around
the
company
objectives
and
positions.
Strategic
supply
chain
management
enclose
a
wide
range
of
strategic
issues,
about
how
to
run
a
business
in
ad
equation
to
which
product,
to
the
demand
and
to
the
internal/external
factors.
Businesses
are
restraint
to
two
main
qualities:
time
and
costs;
and
strategy
are
in
line
with
them
by
trying
to
enhanced
or
reduce
them
to
make
company
prosperous
and
competitive
amongst
others.
As
stated
in
Strategy
analysis
and
practice
book,
the
example
of
Wahaha
company
show
that
the
management
strategy
within
a
small
soft
drink
company
can
actually
compete
with
giant
of
the
industry
such
as
Coca-Cola
company
and
PepsiCo (John, et al., 2005).
The
strategy
is
the
art
of
taking
advantage
of
organisation
of
the
structure
and
acting
on
the
external
factors
to
valuate
the
company
assets
at
their
best.
17
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19