Customer portfolio and Strategic Account Management 04256 Essay

Customer portfolio and Strategic Account Management 04256 - Essay Example Arguments made by Johnson and Selnes (2004), states that focus should be made on the wider managerial perspective that considers the company’s entire customer portfolio rather than focusing on the few close customer relationship in order to maintain profitability, shareholder’s value and company growth. According to the authors Harri Terho and Aino Halinen (2007), customer portfolio analysis is an action by which a firm examines the present and the future customer values for building a balanced consumer structure through efficient allocation of resources to individual or customer group. The equilibrium of the customer portfolio can be considered as the vital goal of the customer portfolio analysis due to its explicit presence in all the proposed. Therefore the portfolio models earlier were based on mathematical optimization and have major focus on the formation of a favourable portfolio of products (Sackmann, Kundisch and Ruch, 2010). Ryals (2003) also stresses on the need to analyse the total relationships as an investment portfolio where the balance would be the consequence of the customer relationship related long term revenues and risks. The main focus of the customer base is to determine the significance of customer relationships to the company and differentiating between consumers of different worth. The analysis is the future outcome which is not restricted to the monetary value of the customers but also involves the varied consumer roles in providing present and future value for the company (Johnson and Selnes, 2004). The theory of customer portfolio study is related to the theory of segmentation but still varies considerably. Portfolio analysis centres on analyzing the existing value of customers as stated by H. Terho, A. Halinen in the Journal of Business Research (2007) from the main companys point of view whereas segmentation usually focuses on segregating the market into

DB2_SBS318 Essay Example | Topics and Well Written Essays - 500 words

DB2_SBS318 - Essay Example People live in the atmosphere of immigration, without beginning and end, but only few know the true origins of Mexican migration to the United States. As such, the purpose of Gonzalez’s book is to provide facts, describe the history of immigration from Mexico to the U.S. and to emphasize the differences between Latin American and European immigration. It is really important as the immigrants need to know the history of their move to the United States in order to understand their position and choose the right direction. In his book, Gonzalez (2001) discusses the three important themes. First, the roots of the Latino immigration and its evolution are described. A reader can learn the important facts, which were not known before. Second, Gonzalez applies to the anecdotal evidence from one particular family, to reconsider immigration experiences from the viewpoint of one Hispanic family. Finally, Gonzalez describes modern Hispanic immigration in relation to the growth of political mobilization among the Hispanic immigrants. The themes of cultural assimilation and the marginalization of minorities have to complete the picture of Mexican immigration to the U.S. This is essential for Mexican immigrants to obtain the right understanding of their past and the author wants to help with it. Unfortunately, not always can the author stay neutral. Gonzalez (2001) is a prominent Latino journalist, and he cannot always conceal his rage at American racism and domination. This can be easily traced throughout his writing. The struggle against racism is an important issue but the author seems to overemphasize the differences between European and Mexican immigration, while it is known that many immigrants from other countries were treated even worse. Nevertheless, what he writes at the end of the introductory chapter of his book lays the foundation and defines the direction of his argument: â€Å"The American people still cling to

Comparison between EDF group (lectricit de France) and E.ON S E from Assignment

Comparison between EDF group (lectricit de France) and E.ON S E from an investor's perspective point of view - Assignment Example It is assumed that the reader has basic knowledge of these tools of analysis. Capital Asset Pricing Model (CAPM) According to Rai University: â€Å"The CAPM was developed to explain how risky securities are priced†¦CAPM aims at a more practical approach to stock valuation.† The assumptions of CAPM include: 1. Investors hold diversified portfolios 2. Single-period transaction horizon 3. Investors can borrow and lend at the risk-free rate 4. Perfect capital market (Rai University, 2013) Capm reflects that investors need to be compensated in two ways Time Value Of Money Risk (Investopedia, n.d.) The risk-free (rf) rate in the formula represents the time value of money invested at a minimum rate while the other half of the formula represents market risk applicable to the company. CAPM is in the view that the expected return of a stock is equal to the rate on a risk-free stock plus a risk premium. If the expected return does not match or meet the required return then any such investment is termed to be not feasible and is not to be carried out. The betas calculated in the attached working represent the risk of the specific company in relation to the market. When coupled with the market equity risk premium and the risk free rate, we can establish a minimum rate of return that would be required by the shareholders in relation to risk and returns in the market The calculated ROE of both companies is in the 5%-7% range showing that the companies’ shareholders require a minimum return of 5% as compared to the risk and return level they face in their investment in the company’s stock. CAPM is not an absolute model as it faces many limitations. It assumes markets are information efficient and all investors preferences are the same. These assumptions may not hold true in the actual market place and so, there are other models to calculate required return on equity, such as the gorden growth model or the earnings multiplier model. The major assumptio n in CAPM relates to perfect capital market and the assumption of all perfect information being available to investors. This introduces the concept of efficient market hypothesis. Efficient Market Hypothesis - EMH Many different theories state that it is simply impossible to beat the market. This is mainly due to the fact that market efficiency leads share prices to reflect all relevant information at any given time. The Efficient Market Hypothesis believes that all the stock traded always hold their fair value hence it is impossible for the buyer to purchase undervalued stocks or for the seller to sell at an overvalued price as stated by Malkiel, 2003. Due to this the only way that any investor may get a higher return is by getting hold of high risk stocks or a balanced portfolio (Pesaran 2010) On the other hand people against the hypothesis highlight the example of Warren Buffet beating the market consistently over fairly long periods (CBS, 2012). â€Å"Beating the market† is considered impossible under the efficient market hypothesis. Another aspect highlighted by those against the theory is events of 1987 during which the Dow Jones Industrial Average fell by more than one fifth in a day. This gives proof that the prices of stock may show a deviation from their fair values. Efficient Marke

AMERICAN HISTORY SINCE 1865 TO 1900 Essay Example | Topics and Well Written Essays - 1250 words

AMERICAN HISTORY SINCE 1865 TO 1900 - Essay Example Nikon and Kennedy was elected president. John F. Kennedy and his vice president, Lyndon B. Johnson took the office in 1961. There has always been a power struggle between the left and right wing of politics, the political left stood up for social policies that would help the working class, the business and industry where as the political right is all for the conservative Christian values and support a free market system. The democrats who had won the election in 1960 were the party at the center; they faced a lot of opposition from the republicans including the most significantone that the elections were rigged and Kennedy falsely won the elections. Posner in one of his article mentioned that when the Kennedy votes suddenly rose by 40,000 in Texas the republicans cried that this was election fraud, he also wrote, â€Å"while he was careful not to put a public imprimatur on the concerted Republican effort to challenge the election results, he privately not only authorized it, but act ively encouraged it† (Posner). After the assassination of Kennedy his vice president Lyndon B. Johnson took the oval office by defeating Barry Goldwater; a nominee of the Republican Party in 1964. After the New Deal Coalition collapsed in the mid-sixties, the riots and the Vietnam War and the opposition of the civil rights movement by many southern democrats the republicans found a way to gain power, this shifted the southern power that Democrats had into the laps of the republicans as many African Americans were now supporting the Democratic Party. This power shift was also due to the Johnson’s increasing interest in The Vietnam war, which leaded to conflicts inside the Democratic Party. And in the election of 1968 the Republican Party won; Richard Nixon defeated Huber H. Humphrey and became the president of United States. It was in the final years of the American Civil War, when congress started to debate for the rights of the former freed

Effects of Risperidone in Children with Autism

Effects of Risperidone in Children with Autism   Crystal Branch   ANOVA Article Critique Researchers complied detailed data regarding two groups a sample group and a controlled group of children to study the cognitive effects of risperidone in children with autism and irritable behavior.  Ã‚   The study employed specific measurements designed to determine if children with autism and irritable behavior have an increase of cognitive performance while taking up to 3.5 mg of risperidone.   Recently a few studies have assessed cognitive effects of risperidone in children with severe behavioral disturbance. Gà ¼nther et al. (2006) assessed open-label risperidone in 23 children with attention-deficit/hyperactivity disorder (ADHD) and disruptive behavior disorders (DBDs) and in normal controls matched for age and IQ. This was a multi-site investigation that was conducted at five medical centers. After being assessed at the screen visit, participants who met inclusion criteria for the study were then reassessed with clinical instruments at baseline and weekly for the next 8 weeks.  Ã‚   So, researchers decided to conduct a double-blind placebo controlled groups on their attention span, how well their verbal learning skills are, diminished or improved hand/eye coordination, and spatial memory was evaluated.   Each of the areas was measured before, during and after 8 weeks of participation. All changes in performance were compared by repeated measures ANOVA. Will the use of risperidone in doses 0.5 up to 3.5 mg/day researchers want to know the question what the overall effect the drug has the on cognitive performance of children ages of 5-17 years old, diagnosed with autism and that suffer from irritable behavior. The review will show what was used to assess the variables and statistical methods created to decide if the study produced any valid result. The authors want to know answers through research if there are actually any significant effects the drug actually has on cognitive processing abilities in autistic children that also suffer from irritable behavior that uses risperidone. Through research and study, the authors looked for answers to this question and set a hypothesis they created around their research study. The authors implied that the null hypothesis (Ho) is that there would be no difference between placebo and risperidone (Aman, M. G., Hollway, J. A., McDougle, C. J., Scahill, L., Tierney, E., McCracken, J. T., . . . Pose y, D. J. (2008). The alternative hypothesis (Ha) should indicate that there would be a difference between cognitive performance of the sample group vs the controlled group.  Ã‚   A total of 38 children between the ages of 5-17 years of age were a part of the sample group, these children have been diagnosed with autism and severe behavior disturbance. Any participants receiving psychotropic medicines before the study went through a washout for at least 2 weeks prior to randomization (4 weeks for antipsychotics or fluoxetine). Cognitive assessments were done at Baseline, Week 4 and Week 8. Participants were started at either 0.25 or 0.50 mg with gradual adjustments over the first four weeks. Maximum dose for smaller subjects (15-45 kg) was 2.5 mg/day, whereas the maximum dose for larger participants (45 kg.) could be as high as 3.5 mg/day (1). As protocol requires during this period as in any clinical study, the subjects did not receive any form of their usual treatment so the effects of any current treatments are eliminated or assumed to be eliminated from their system for the benefit of this study.   Instead of immediately stopping and starting any new treatment, there will be a 2-4week time period where the treatment from the first drug is washed out of the patients system. Study participants were male and female children or adolescents, ages 5 to 17 years 2 months, with mental ages 18 months who had autism and severe behavioral disturbance. To be enrolled in the study, participants received a score of 18 on the Irritability subscale of the Aberrant Behavior Checklist (ABC) (Aman and Singh 1994). In addition, participants must have been rated with a Clinical Global Impressions-Severity (CGI-S) score of 4 by an experienced clinician (CGI-S; NIMH 1985, Arnold et al. 2000), and according to the Diagnostic and Statistical Manual of Mental Disorders, 4th Edition (DSM-IV) (American Psychiatric Association, 1994) a lifetime diagnosis of autistic disorder. The diagnosis of autism was based on a clinical evaluation that included a DSM-IV interview with a parent and direct observation of the participants. The clinical diagnosis was corroborated by structured interview with one or more parents acting as informants, using the Autism Diagnostic Interview-Revised (Lo rd et al. 1994). This study has several limitations that caution against over-embracing the statistically-significant (and one equivocal) findings. First, given the exploratory nature of this work (there is only one other study of atypical antipsychotics in children with PDDs), we adopted the .05 level for alpha. Had we corrected for multiple comparisons, none of the comparisons would have exceeded alpha. Second, only a minority of our participants were able to perform these tasks. This resulted in (a) small sample sizes and (b) the observation that the testable group had a higher IQ and was older than the untestable group. Despite these obvious limitations, the findings are noteworthy for several reasons. First, autistic disorder is often coupled with a substantial cognitive disability.   Secondly, the significant diversification, indicated by partial eta squared, indicates substantial gains in adaptive skills if upheld by future studies. Next, it is noteworthy to point out that data assembled from various sites under double-blind conditions, which may help to dismiss any individual examiner effects. Finally, the mechanism of any improvement is unknown.

Modern Computer :: essays research papers

Modern Computer Is the Computer important in the world? I am sure it is significant for the youths. Nowadays, most of the youths has owned their computer in the house. The reason for the computer is very powerful tool. It brings a lot of the functions to do any certain the things. It makes the people to enjoy its functions own. Computer is useful for finding the information. As long as the Internet is installed in the computer, the people can be able to what they want to find. Of course, they have to waste the time for doing. Acquiring the information, they feel that it is valuable. Renctly years, the number of people is increased by using computer. They can seek the information directly in Internet. That is a very convenient for the people. When the students do the projects, they will find the information in Internet, except library. Finding the things, they compose of the information and construct it in the computer its function such as Microsoft Work, Excel, etc. They have ability to achieve the people’s aim they want. In fact, the computer has plenty of useful functions. The people may not acquaint to all of the functions, only knowing a part of them. They need the time to know every thing in the computer for a long time. The level of the computer is upgraded on each year. Automatically, the functions and others will be increased such as the speed will faster than previous speed. We could say that the computer be able to instead in the position of the people mostly. Of course, the human is clever than the computer. Sometimes, the students will play the games, as they are boring. It makes the students to get the relaxing. On account of their studies bring the some pressure, this may cause them to get vexation, so they need to release their pressure, to get the balance of their mood. Modern Computer :: essays research papers Modern Computer Is the Computer important in the world? I am sure it is significant for the youths. Nowadays, most of the youths has owned their computer in the house. The reason for the computer is very powerful tool. It brings a lot of the functions to do any certain the things. It makes the people to enjoy its functions own. Computer is useful for finding the information. As long as the Internet is installed in the computer, the people can be able to what they want to find. Of course, they have to waste the time for doing. Acquiring the information, they feel that it is valuable. Renctly years, the number of people is increased by using computer. They can seek the information directly in Internet. That is a very convenient for the people. When the students do the projects, they will find the information in Internet, except library. Finding the things, they compose of the information and construct it in the computer its function such as Microsoft Work, Excel, etc. They have ability to achieve the people’s aim they want. In fact, the computer has plenty of useful functions. The people may not acquaint to all of the functions, only knowing a part of them. They need the time to know every thing in the computer for a long time. The level of the computer is upgraded on each year. Automatically, the functions and others will be increased such as the speed will faster than previous speed. We could say that the computer be able to instead in the position of the people mostly. Of course, the human is clever than the computer. Sometimes, the students will play the games, as they are boring. It makes the students to get the relaxing. On account of their studies bring the some pressure, this may cause them to get vexation, so they need to release their pressure, to get the balance of their mood.

7 Principle of Supply Chain Management Essay

1. Introduction Before we are to analysis this article, first let us clarify something before we start .In this article, it states the 7 principles of supply chain management and its importance in practical ,many of us must have a question, what is a supply chain management and why is it important for a company today ? See more: Satirical elements in the adventure of Huckleberry Finn essay Supply chain management (SCM) is the process that is used by a company to ensure that its supply chain is efficient and cost effective. They are aiming at provide the highest degree of customer satisfaction at the lowest possible cost through management of material and information flow in the supply chain .It requires the commitment of supply chain partners to work closely to coordinate order generation, order taking, and order fulfillment. Supply chain management consists of three flows: product flow, information flow and finance flow. Product flow is the physical movement of raw materials, work-in-process and finished product from supplier to manufacturer to the wholesaler and on to the consumer. Information flow is the shared information within the supply chain garnered from the various systems such as the transport planning systems, warehouse management systems, customer record management, order fulfillment systems and more. The third flow is the flow of money. This would be billing, the giving of credit, the transfer of money from manufacturer to supplier or from the consumer to the manufacturer or reversed. Any documentation with regards to money will be managed as part of this flow. Benefits of integrated supply chain management: There are countless benefits that supply chain management can bring to companies. Not only does it make for shorter lead-times to a customer and improved planning and forecasting capabilities for all partners of the supply chain, it also leads to cost savings and efficiency optimization. Time advantage is created when one of the business processes is faster than the other in achieving the same result. It is created through eliminate those processes that don’t add value but only add lead time. It becomes a competitive advantage when the firm develops processes that will enable it to quickly introduce new products in the market and portray the company as a pioneer. Cost advantage is created when the superior business process is cheaper to operate than the inferior other. It arises from better manufacturing process, cheaper inputs, or higher levels of automation that increase efficiency. Efficiency advantage is created when the superior business processes provide higher throughput, better asset utilization which include people, machine, technology and those can provide useful function in the business process .It normally results in more favourable cost structure and supports a cost-based business strategy. 2. Analyzing 7 principles Principle 1: Segment customers based on the service needs of distinct groups and adapt the supply chain to serve these segments profitably. Customer Segmentation is the subdivision of a market into discrete customer groups that share similar characteristics. Companies try to boost profitability by tailoring their supply chain strategy to each customer and product in their portfolio through segmentation. It help companies to gain competition by identify those underserved segments and then developing unique appealing products and services. By understanding the profit profiles of their customers and products, companies can develop marketing campaigns and pricing strategies to get maximum value and thus increase the overall profitability of their portfolios. However in today’s real market, there still existing â€Å"one size fits all† supply chain processes and policies, some companies use this method to serve their customers .The result is obvious, some customers are over serving and undeserving others, the more deeper influences are result a significant profitability from the over serving customers and cash-flow leakages and potentially lost sales from the undeserving customers. Segmentation can help address some problems in the supply chain processes .First is demand variability, properly structured segmentation policies for customers and products can significantly reduce the impact of demand variability. So what is variability? Variability is basically the difference between what we expect from something and what actually happens. It is the statistical distribution of outcomes one can expect from a process. Another is to simultaneously provide high levels of responsiveness and efficiency. In order to maximize sales and profits, companies may choose to use different methods to serve customers .Some products within a portfolio could be served through an efficient supply chain while others are served through a responsive supply chain. For example, a chip company manufacturing two different types of chips which are normal one and high-tech chips .company may deliver their normal chips through efficiency supply chain and deliver their high-tech chips through highly responsive supply chain. This is what we can understand as segment products through its features .One segment is for normal products which are predictable and another for high-tech products which is unpredictable .Company can through monitor the different segments to set different forecasting and stocking policies. In the 1990s Dell revolutionized both the computer industry and supply chain management with its direct-to-consumer business model. For the past several years, however, the company has been transforming its supply chain into a multichannel, segmented model, with different policies for serving consumers, corporate customers, distributors, and retailers. Through this transformation, Dell has saved US $1.5 billion in operational costs1 and has moved to the number two spot on Gartner’s â€Å"Top 25 Supply Chains† list. Dell is one of a number of enterprises that are benefiting from supply chain segmentation, a process by which companies can create profitable one-to-one relationships between their customers and their supply chains. Under this model, different customers associated with different channels and different products are served through different supply chain processes, policies, and operational modes. The goal is to find the best supply chain processes and policies to serve each customer and each product at a given point in time while also maximizing both customer service and company profitability. Principle 2: Customize the logistics network to the service requirements and profitability of customer segments. Logistics networks configuration is such kind of problems concerning with the number and site of warehouses and manufacturing plants, allocation of customer demand, distribution of warehouses to production plants along the whole process of material flow .Ideally, the best configuration must be able to deliver the goods to the customers within the shortest period of time meanwhile at the lowest cost. The objective of design or reconfiguration of the logistics network is to minimize annual system wide cost subject to a variety of service level requirements. In today’s environment of global economy, companies must be figured out some special ways that can utilize worldwide resources to keep the advantages of competition .They need to concern variety of problems such as where the most appropriate manufacturing facility should be that available for source products ,how to keep the balance between inventory ,transportation and manufacturing costs ,how to meet the demand uncertainty ,especially for those multinational companies because they have large scale of production and the cost definitely will be complicated than those small companies .All the successful companies have a well developed and realizable logistics system .High efficient logistics system will benefit companies from cost controlling ,high level customer service satisfaction and reach a business successfully . Now let’s take a look at Audi, one of the most successful car manufacturer in the world and how does the logistics network help them stand in the world. Audi outsource its logistics function to third-party logistics firms, so their manufacturing companies can focus their efforts on their core competencies and 3PL only needs to be efficient and effective to meet customers’ demands. In Audi Company, there are three new models for logistics network design with special focus on the perspective of 3PL companies. The objective of these new models is to increase the effectiveness of the resulting network design and the utilization of facilities in the network. 3 models of logistics network: †¢ Logistics network design with differentiated delivery lead time, †¢ Logistics network design with price discount, and †¢ Consolidated logistics network design using consolidation hubs. This shows that designing network with differentiated delivery lead time can reduce the network cost, while the other shows price discount can result in a network design with higher net profits, adding consolidation hubs at suitable locations near to the suppliers, it can leverage on concave Audi’s cost to reduce the overall network cost. This reflect that how does a good logistics network can help a company to be more productive. Principle 3: Listen to market signals and align demand planning accordingly across the supply chain, ensuring consistent forecasts and optimal resource allocation. This principle teaches us the importance of a good sales and operations planning to a company. Sales and operations planning is a process where executive level management regularly meets and reviews projections for demand, supply and the resulting financial impact. S&OP is a decision making process that makes certain that tactical plans in every business area are in line with the overall view of the company’s business plan. Each year, companies always have to spend a large amount of money on out of stock, excess inventory and excessive discounting due to imbalance between supply and demand .In addition ,promotions, new product introductions, packaging changes and changing demand patterns can all wreak havoc on the demand and supply planning process. But if companies implement sales and operations planning, it will help them gain the visibility and agility to improve product management and promotional planning, better understanding those necessary and unnecessary build-ups of inventory. S&OP is effective because it comprehensive and take everything into consideration .It develops a well coordinated operating plan in support of customer demand, business plan as well as companies strategy .It describe a complete picture of forecast demand ,supply capacity and financial information . Principle 4: Differentiate product closer to the customer and speed conversion across the supply chain. This principle focus on two factors, one is product differentiation and the other is speed conversion across the supply chain .Product differentiation is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. In economics, successful product differentiation leads to monopolistic competition and is inconsistent with the conditions for perfect competition, which include the requirement that the products of competing firms should be perfect substitutes. The purpose of product differentiation is to develop a position that customer see could be seen as unique ,as the product become more different, categorization becomes more difficult and hence draws fewer comparisons with its competition. If a company does very in product differentiation, it will divert people’s eyes from price factors to non-price factors such as product characteristics, promotional variables. After companies have differentiated their product ,they should think about some ways that can deliver it into customers hands which require them to speed conversion and compress the lead time .It has been consistently argued that time is the competitive weapon in the market .Lead time compression will have a greater effect on supply chain effectiveness .In the increasingly global marketplace most companies are competing with similar machines ,technologies and expertise ,the one who can launch product faster or speedup marketplace responsiveness will win market opportunities .This is the point they should catch up . Principle 5: Manage sources of supply strategically to reduce the total cost of owning materials and services. The relationship between buyer and supplier have been attracting a lot of people’s attention, a company maintain a good long tern buyer-supplier relationships will benefits both parties .No only company can keep its competitiveness in the marketplace meanwhile secure the access to external resources ,but also supplier can reach to a high profit for the sake of long term relationship .In other words which means the more close their relationship are ,the more benefits both parties will receive such as lowered costs and improve profits .Referring to this principle ,a company only with a good resource management system, knowing when to order, when to replenishment ,analyze the whole inventory system ,minimize the delivery time from supplier ,with all those factors implemented can make the company save money even make a profit . Principle 6: Develop a supply chain-wide technology strategy that supports multiple levels of decision making and gives a clear view of the flow of products, services, and information. The purpose of supply chain exists is to satisfy what the customers’ require .So in this case in order to meet customer requirement on time ,the information must be made available to those who need to plan and execute the operations of the supply chain. Thus a information technology should be implemented in the supply chain to ensure that information available when needed .We need communications technology to distribute information, storage technology to maintain databases, and processing technology to process the data into meaningful information. Under the technology strategies implement, efficiency and effectiveness of supply chain could be greatly enhanced based on the use of information technologies. New technological solutions have provided companies with completely new ways for information sharing in support of coordination and on the other hand, for handling of transactions with less friction Technology also plays an important role in the success of supply chain management, the biggest benefits technology has given to supply chain is the ability for companies to collaborate. For example, a supplier may build a connection with their distributors through internet, so when there is a shortage appears distributors can realize it and an order for the shortage could be placed automatically. This kind of collaboration can better use of existing resources and achieve a large profit margin. Principle 7: Adopt channel-spanning performance measures to gauge collective success in reaching the end-user effectively and efficiently. In order to make the supply chain becomes more effectively ,we need to measure the supply chain performance not only focusing on cost measurement but also need to consider other metrics including service ,financial and innovation .This principle refers to the inadequate of traditional accounting systems, it points out some factors that traditional accounting system do not take into consideration .Traditional cost accounting allocates the costs to the list of overhead and supporting those activities that company needs to do .There are different volumes of activities so that higher volume activities absorb a higher share of costs .However ,not all the activities costs vary directly with volume ,there are other factors may cause them such as the number of new customers, production line set ups and different parts to manage .If a company wants to achieve true profitability, they need to better manage those cost relationships correctly . 3. Conclusion Supply chain management typically begins with the acquisition of raw resources and ends with the delivery of the final goods to customers.It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. The 7 principles described in this article is just give us guide line in which if we want to make a successful supply chain .Keep learning from others and finding the shortcomings if we want the supply chain to be more effectively and efficiently, Improving a process as complex as the supply chain can be daunting, as companies are challenged with finding ways to meet ever-rising customer expectations at a manageable cost. To do so, businesses must identify which parts of their supply chain process are not competitive, understand which customer needs are not being met, establish improvement goals, and rapidly implement necessary improvements.