T1.3

T1.3 – Discussion Question #3 (pg. 50)

3. You have decided to open an internet site to buy and sell used music CDs to other students. Describe the value chain for your new business.

The Value Chain for my new CD business would start with Upstream Management. Initially, the Value Chain would begin with the purchase and acquisition of Raw Materials. In this case, the raw materials needed would be used music CDs. These could be acquired from a variety of sources. Next, I would need to find a way to transport the raw materials (CDs) to my warehouse or storage facility (inbound logistics). Shipping methods could include crate transportation, U.S. Mail, truck transportation, and more. The last step in Upstream management would be to store my raw materials, CDs, in a building or warehouse, and organize them appropriately. The production stage of my Value Chain has already been accomplished by a manufacturing company, that created the CDs initially. Finally, the Downstream Management portion of my company would include finding and locating the CDs purchased in my warehouse (finished product storage), shipping the CDs to their purchaser/final destination (outbound logistics), and marketing and sales - to process and facilitate transactions, promote business, and advertise. Finally, the last element of Downstream Management, customer support, would be the final element of my value chain, and would serve to address any problems that arose for my customers after the purchase of their used CDs. At any stage in the value chain, Information systems could be employed to increase efficiency, quality, and cost effectiveness, thus increasing the “value” of goods as perceived by the customer.