1.

Focusing on the first five components (ABN002, ABX001, BBR474, BLY283, BNT172), map TelCo’s
supply chain with the following steps: Components, Configurations and Markets.

Components Configuration Markets

Here we mapped the four configurations that exist in the center. Then we examined which of the first
five components required each configuration, which you can see mapped on the left. Second, we
mapped which of the five markets demand each configuration, which you can see mapped on the right.

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2. Considering the usage of the different components across the different CAS technology
configurations and the type and number of configurations currently deployed in each market,

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evaluate the number of customers affected by a disruption of each particular component.

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The above table shows the number of customers and percentage of customers affected by a shortage of
each component. We calculated by using the market populations using each configuration and the
number of components in each configuration. We applied the percentage of population using that
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component to the total population to find the population for each component. Then we applied that
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percentage to the overall population to find the customer number.

3. Identify the components that are (i) the most critical from a technical standpoint and (ii) where a
shortage would affect the largest number of customers.
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 The table above shows the components ranked as highest in criticality (1), which considers the three
stipulations discussed in the case. Seven of the eight technically critical components also affect all
customers due to their presence in all configurations.

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This second table displays the top components in terms of customers affected by a shortage. These
components are used in nearly all configurations and affect the largest number of customers. We used a
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heat map to determine where to truncate the data, and the most critical are shown here.

4. For each component, estimate the demand rate from the current operations (using the MTTF metric
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if the demand rate has not been measured) and from future project development. Based on the
average inventory levels, estimate for each component the “Time to Survive”, i.e., how long TelCo can
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continue its current operations and planned project development without disruption even if the
component vendor experiences a shortage.
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In Replacement rate per week column, green cells show calculation for replacement rate for those
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components not given and the white cells in that column designate those provided by the case. Yellow
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cells show our final calculations. In ’Demand: Components needed’ this column shows the current
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demand rate by component based on the current demand. In the two far rows on the right, the number
of weeks for current projects and number of weeks for future projects are shown. This represents how
many weeks Telco can continue to manufacture with the current inventory by component.
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Green cell = demand components needed / theoretical MTFF (weeks)

Demand per components needed = For each component, we used a formula to multiply the number of
components needed per configuration in Table 1 by the number of those configurations currently
deployed in Table 5 and then add those calculations of CFG1, CFG2, CFG3 and CFG4 together to find
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total demand. (Example formula for ABN002: =C3*$C$47+D3*$C$48+E3*$C$49+F3*$C$50)

Weeks for current projects = average inventory level (spares) / replacement rate per week

Weeks for future projects = average inventory level (new projects) / replacement rate per week
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5. (Bonus Question worth 15 points) Suppose that the supply chain for one of the most critical
components you identified is as depicted in Exhibit 3. What is the impact of a disruption at Stage 3C,
which would affect TelCo’s current supplier for a duration of 12 weeks, and would it affect an
alternative supplier for a duration of nine weeks? For how many weeks would TelCo experience a
disruption in its operations? How many current customers would be affected? Suppose that the
inventory carrying rate is 20% and that the average revenue per user (ARPU) who is potentially

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 affected by the disruption is $200 per week. Should TelCo consider holding more inventory of that
particular component?

Exhibit 3 involves the supply chain of the Fuse unit (MBR034). Exhibit 3 with Stage 3C has a current lead
time of 12 weeks. But there is an alternative supplier which can supply 3C in 9 weeks. However, that
component currently has 7.84 weeks of inventory. If the supply chain is disrupted due to supplier
change, we would need to implement the 3C alternative which takes 9 weeks to recover inventory.
Because we have the 7.84 weeks inventory, there would be an outage of 8.12 days of outage. 3C is an
input to 2A, 2B, 2C and 2D, which means during the inventory waiting period, all these processes are
halted. Additionally, this means 1A, 1B and 1G can’t take place and Item A is halted. The number of
customers who will be impacted is 100% because it's a critical component for all four configurations and
is needed in all markets. To calculate we looked at the current inventory level 128, applied 20% to it to
find 38.4 and then looked to see whether that would be enough to offset the 8.12 days of outage. They
should hold more inventory of MBR034 because it costs $0.10 to purchase so they could purchase 2,000
for the same price it would cost the company to have one week of disruption and due to its customer

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impact and being used in all configurations, it is a criticality of 1.

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