Week 1 Task 4

Value Chain

The value chain, according to the textbook, is a series (chain) of acitvities that includes inbound logistics, warehouse and storage, production and manufacturing, finished product storage, outbound logistics, marketing and sales, and customer service. For an Internet site that buys and sells used music CDs, the vaule chain would be as follows:

1. Procurement - Used CDs bought for resale, system to acquire used CDs (company can't sell used CDs if they don't buy used CDs from somewhere, definitely add value to the business)

2. Inbound Logistics - Purchased used CD tracking system (value is in knowing where they are in the procurement process such as purchased but not shipped yet, shipped, or shipped and received)

3. Warehouse and Storage - Inventory control system for purchased used CDs (value is in knowing what CDs have been purchased so as not to purchase too many of one particular CD)

4. Production - Used CD inspection/testing and repackaging systems (value is in knowing

5. Finished Product Storage - Automated storage and order fulfillment systems

6. Outbound Logistics - Distribution systems for sold CDs (adds value to 5 by ensuring that sold CDs are sent to the correct locations)

7. Marketing and Sales - Sales generation and promotion planning systems (value in revenue generation)

8. Customer Service - CD shipment tracking systems and customer service control systems (value in customer satisfaction and retention)