Reference no: EM132108

Question 1: (a) Briefly define the following two supply chain metrics: (i) inventory turnover ratio and (ii) supply chain velocity.

(b) Supply chain management is a complex task, and while some companies are successful others are not. Identify and discuss two factors that could lead to success or failure in supply chain management (examples would be a bonus).

(c) High Product Variety is one of the three operations objectives of supply chain. Describe why this has become an important objectives and what are the associated difficulties.

Question 2. (a) A Best Buy store places weekly orders for IPad deliveries from the regional warehouse. The Supply Chain manager is considering the use of a moving average method to automate the ordering process. IPad unit sales at the store for the last

13 weeks is given below: 

Month 1 2 3 4 5 6 7 8 9 10 11 12 13

Demand 58 49 52 52 56 48 47 51 54 51 53 48 53

i. Using the Mean Squared Error (MSE) criterion, evaluate and select between a 2, 3 and 4 period MA forecasting method.

ii. Focusing on sensitivity why was the selected method best suited for this specific case.

(b) Describe the highly responsive Zara supply chain and how this has allowed it to outperform its competition in the fashion business.

(c) In a grocery supply chain for diapers, the products are shipped from the National Warehouse, to the Regional Warehouse, to the Local Distributor, and finally to the Retailer. Currently the ordering parameters (in weeks) for the: Retailer are L=2 and P=6; Local Distributor are L=3 and P=8; and Regional Warehouse are L=3 and P=12.

(i) Calculate the Bullwhip ratio (VarQ/VarD) between each pair of suppliers in the chain and the cumulative ratio between the national warehouse and retailer.

(ii) Make one suggestion that could improve the cumulative bullwhip ratio without much forecasting change.

Questions 3. (a) Define the following: (i) Ready to promise inventory (ii) ABC inventory analysis and (iii) Independent demand.

(b) Scotts has recently opened a new lawnmower assembly plant in China. Currently engines are produced in the US and shipped to China and the ordering cost is $8500. The annual demand for the lawnmower engines is 37500 units and the holding cost is $34.50 per unit per year.

i. What is the EOQ and the annual supply chain cost?

ii. A local supplier in Guangzhou proposes to supply engines from its production plant. Orders will be replenished at a supply rate of 780 units/day and the ordering cost will reduce to $5300. What are the annual costs savings of this proposal.

Questions 4. (a) You are appointed the manager of a warehouse that is transitioning from a traditional model to a supply chain mode. Identify two initiatives you would take to update the warehouse.

(b) List five factors that determine the optimal number of warehouses in a product distribution network.

(c) Weber has two production plants (P1, P2), from which it ships barbeque grills to its three national warehouses (W1, W2, W3). From these warehouses it feeds the supply chain of Lowes through eight regional distribution centers (D1, D2, D3, D4, D5, D6, D7, D8). The shipping costs between these locations, plant supply capacity and the weekly supply demand data in cases are shown below:

Supply Shipping Cost Weekly Shipping Cost

Capacity W1 W2 W3 Demand W1 W2 W3

P1 30000 $3.25 $4.50 $5.25 D1 8000 $4 $3 $1

P2 30000 $4.40 $2.20 $4.60 D2 13500 $3 $4 $1

D3 11900 $2 $5 $4

D4 3200 $1 $6 $2

D5 1400 $1 $3 $5

D6 800 $5 $2 $3

D7 6800 $4 $1 $2

D8 900 $5 $2 $1

(i) Solve the network distribution problem via linear programming using MSSolver

(ii) Plant P2 needs to shut down one of its assembly lines and the capacity is reduced to 23000 units. What is the new distribution plan, and what is the additional supply chain cost.

(iii) If the W2 warehouse has a maximum distribution capacity of 12000 units/week how does the solution in (i) change?