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a web based hypermarket supply chain management system

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Chapter 2<br />

LITERATURE REVIEW<br />

2.1 State of the Art<br />

Research has been conducted on SCM regarding the objectives, the different ways on how<br />

it can be implemented, as well as the issues associated with it. SCM was looked at as the<br />

coordination of products and information flows among suppliers, manufacturers, distributors,<br />

retailers and customer(Fig.2.1) [12]. With appropriate exchange of information among<br />

these, costs can be reduced as well as improved customer service attained. The forecast was<br />

considered as the most crucial factor that could influence the <strong>supply</strong> <strong>chain</strong>. Forecasts are<br />

needed to enable firms in the <strong>supply</strong> <strong>chain</strong> to make planning and inventory decisions which<br />

mainly base on demand forecasts. When forecasts are inaccurate, this leads to back ordering<br />

in which the quantity that is ordered does not reflect the demand for the period it is supposed<br />

to cover. Information sharing and continuous coordination results in cost reduction<br />

for both the supplier and retailer [12].<br />

Figure 2.1: Basic <strong>supply</strong> <strong>chain</strong><br />

4

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