Question 1.

a) Supply Chain Management Definition:

- Supply chain management encompasses the coordination of activities involved in producing and
delivering goods. It’s about optimizing these processes for efficiency and customer satisfaction.

- Key activities include sourcing raw materials, planning production, managing inventory levels, and
ensuring timely distribution.

b) Strategic, Planning, and Operational Decisions for “Shwapno” (Super Shop):

- Strategic:

- Market Positioning: Deciding how Shwapno wants to be perceived in the market—whether as a

premium or budget-friendly option.

- Supplier Selection: Choosing reliable suppliers to ensure a consistent and quality supply of
products.

- Planning:

- Inventory Forecasting: Predicting demand to optimize stock levels and reduce the risk of overstock
or stockouts.

- Product Assortment Planning: Determining the range of products offered to meet customer
preferences.

- Operational:

- Order Fulfillment: Efficiently processing and delivering customer orders.

- Inventory Replenishment: Restocking products to maintain desired inventory levels.

c) Challenges in Information Technology Age:

- Managing Data Security: Ensuring that customer data and sensitive information are protected from
cyber threats.
 - Adapting to Technological Changes: Staying current with evolving technologies to leverage new
tools for improved efficiency.

- Seamless IT Integration: Ensuring that various IT systems, such as inventory management and
online platforms, work together seamlessly to enhance the supply chain.

Question 2.

a) Using the appropriate figures, define the Cost-Responsive Efficient Frontier and the
Responsiveness Spectrum:

- Cost-Responsive Efficient Frontier:

- Graphical representation indicating the delicate balance between minimizing costs and maintaining
responsiveness in a supply chain.

- Helps visualize how adjustments in cost affect responsiveness and vice versa.

- Aims to identify the optimal zone for efficiency without compromising the ability to respond to
market changes.

- Responsiveness Spectrum:

- Categorizes supply chains based on their responsiveness to demand fluctuations.

- Ranges from highly efficient to highly responsive.

- Guides companies in tailoring their supply chain strategy to align with market dynamics.

b) Make a comparison between efficient and responsive supply chains:

Efficient Supply Chains:

- Prioritize cost reduction, streamlined processes, and economies of scale.

- Ideal for stable and predictable demand scenarios.

- May result in lower costs but may struggle to adapt quickly to market changes.
- Responsive Supply Chains:

- Focus on flexibility and swift response to changes in demand.

- Suitable for dynamic and unpredictable markets.

- May incur higher costs but excel in meeting customer demands promptly.
c) What are some problems that can arise when each stage of a supply chain focuses solely on its
own profits when making decisions? Identify some actions that can help a retailer and a manufacturer
work together to expand the scope of strategic fit:

Problems:

1. Inefficiencies: Each stage optimizing for individual profits may lead to redundant processes,
increased costs, and inefficiencies in the overall supply chain.

2. Bullwhip Effect: Decisions based solely on individual profit motives can amplify fluctuations in
demand, causing the bullwhip effect and creating unnecessary inventory fluctuations.

3. Lack of Flexibility: A profit-centric approach may hinder the supply chain’s ability to quickly adapt to
changes in market conditions or customer preferences.

Actions for Collaboration:

1. Real-time Data Sharing: Establish a system for sharing real-time data on inventory levels, sales data,
and market trends between retailers and manufacturers.

2. Joint Forecasting: Collaboratively develop demand forecasts to ensure accurate planning and
minimize the impact of demand variability.

3. Aligned Incentives: Align financial incentives for both retailers and manufacturers to encourage
collaborative decision-making rather than individual profit maximization.

4. Cross-functional Teams: Create cross-functional teams that include members from both retailers and
manufacturers to foster communication and joint decision-making.

5. Technology Integration: Implement integrated technology solutions that facilitate seamless

communication and coordination between different stages of the supply chain.

These actions aim to enhance collaboration, align interests, and improve overall supply chain
performance.

Question 3.

a) Decisions regarding facilities are a crucial part of supply chain design. What factors must
businesses consider while making facility-related decisions?
 - Location: The strategic placement of facilities affects transportation costs, lead times, and overall
efficiency. It involves evaluating proximity to suppliers, customers, and key transportation hubs,
considering both cost and service requirements.

- Capacity: Facilities need to accommodate current demand and have scalability for future growth.
Balancing capacity to meet demand fluctuations is vital for cost-effectiveness.

- Technology: The integration of advanced technologies, such as automation and data analytics,
enhances operational efficiency. Businesses need to assess the feasibility and impact of technology
adoption in facility operations.

- Regulatory Environment: Compliance with local regulations, zoning laws, and environmental
standards is crucial. Understanding and adhering to these factors contribute to sustainable and legal
operations.

b) Identify and describe the key components of transportation that companies must analyze when
designing and operating a supply chain.

- Mode Selection: The choice between transportation modes (road, rail, air, sea) impacts cost,
speed, and reliability. Each mode has its advantages and drawbacks, and the decision should align with
the nature of the products and market requirements.

- Routing: Determining the optimal path for product movement involves considering factors like
distance, road conditions, and potential disruptions. Efficient routing minimizes transportation time and
costs.

- Cost Efficiency: Balancing the speed of transportation with associated costs is critical. Analysing the
trade-offs between expedited delivery and economical transport modes helps optimize overall supply
chain costs.

- Reliability: Ensuring consistency in delivery timelines is essential for customer satisfaction.

Evaluating the reliability of transportation providers and implementing contingency plans for unforeseen
events strengthens the supply chain’s resilience.

Question 4.
a) What are the service factors a manager has to consider when designing a distribution network?
Explain.

- Customer Service Levels: The manager needs to define the desired level of service, considering
factors like response time, product variety, ease of order placement, order visibility, and returnability.
This involves creating a distribution network that supports quick response times, handles diverse
products efficiently, provides a seamless ordering experience, and allows customers to track orders.
 - Supply Chain Costs Affected by Network Structure: The distribution network's design impacts
supply chain costs, including inventories, transportation, facilities and handling, and information.
Balancing these costs is crucial to optimizing the overall efficiency and effectiveness of the network.

b) Which delivery network option is suitable for a high-demand product, and what are the
performance characteristics of this option?

Given the considerations for high-demand products, the “Retail Storage with Consumer Pickup” option
seems particularly appropriate. Here’s why:

Retail Storage with Consumer Pickup:

- Advantages:

- Customer Convenience: Enables customers to conveniently pick up products from a nearby retail
location.

- Reduced Transportation Costs: Minimizes the need for extensive transportation, potentially reducing
associated costs.

- Faster Access: Provides quick access to high-demand products, enhancing customer satisfaction.

- Considerations:

- Operational Efficiency: Requires efficient retail operations to ensure a smooth and quick pickup
process.

- Location Planning: Strategic placement of retail storage points is crucial for accessibility.

This option strikes a balance between meeting customer expectations for immediate access to high-
demand products and optimizing operational efficiency. However, the final decision may still depend on
specific details of the company’s capabilities, customer preferences, and the overall supply chain
strategy.

c) How is logistic management integrated into SCM?

- Logistic Management: In the context of the distribution network design, logistic management
involves optimizing elements like response time, transportation, and facilities.

- Integration into SCM: Logistic management is seamlessly integrated into supply chain
management. It addresses the physical aspects of moving goods, aligning with other SCM
 components, such as demand planning, procurement, and distribution. The overall goal is to
ensure a coordinated and efficient end-to-end supply chain.

Question 5.
a) Summarize and illustrate the basic steps in the decision tree analysis methodology with an
example.

- Decision Tree Analysis: A decision tree is a visual representation of decision-making that involves
choices, uncertainties, and potential outcomes. The basic steps include defining the decision, identifying
possible alternatives, evaluating outcomes and their probabilities, and choosing the optimal path.

- Example: Consider a manufacturing decision on whether to introduce a new product. The decision
tree would outline choices such as product development, market testing, and full production. Each
branch represents a decision point with associated probabilities and outcomes, aiding in decision-
making.

b) Information is the driver that serves as the "glue" to create a coordinated supply chain. Now
identify and explain the role of information technology in supply chain management.

- Role of Information Technology (IT): It allows supply chain to become more efficient and more
responsive at the same time by reducing the need of a trade off.

- Data Integration: IT facilitates the seamless integration of data across the supply chain, ensuring
real-time visibility into inventory, production, and demand.

- Communication: Enables effective communication between different stages of the supply chain,
promoting collaboration and timely decision-making.

- Automation: Automates routine tasks, reducing errors and improving efficiency in areas like
order processing and inventory management.

- Analytics: Utilizes data analytics for better forecasting, demand planning, and performance
measurement.

- Visibility: Provides end-to-end visibility, allowing stakeholders to track and monitor the
movement of goods.

c) Analyze and evaluate the factors that affect the decision to outsource a supply chain function.

- Factors Affecting Outsourcing Decision:

 - Cost Considerations: Assessing the comparative costs of in-house operations versus outsourcing.

- Expertise: Evaluating whether outsourcing brings specialized knowledge or skills that are not
available internally.

- Risk Management: Considering how outsourcing mitigates risks and uncertainties in the supply
chain.

- Flexibility: Assessing the flexibility gained through outsourcing in responding to market changes.

- Quality and Performance: Evaluating the potential impact on the quality and performance of the
supply chain function.

- Strategic Alignment: Ensuring that outsourcing aligns with the overall strategic goals of the
organization.

Question 6.
a) Describe the role of cycle inventory in a supply chain.

- Cycle Inventory: Represents the portion of total inventory that varies cyclically due to regular
production and ordering cycles.

- Role: Helps balance the timing misalignments between production and demand. By strategically
managing cycle inventory, organizations can minimize stockouts and excess inventory, optimizing overall
supply chain efficiency.

b) The weekly requirement of a part is 950 units. The order cost is $85 per order, the holding cost is
$5 per unit per year, and the part cost is $250 per unit. The firm operates fifty-two weeks per year.
Compute the (a) EOQ, (b) annual holding cost, (c) annual order cost, (d) annual total inventory cost.

- Economic Order Quantity (EOQ): Calculated using the EOQ formula to find the optimal order
quantity that minimizes total inventory costs.

Certainly, let's calculate the values:

Given:

- Weekly requirement (Demand): 950 units

- Order cost: $85 per order

- Holding cost: $5 per unit per year

- Part cost: $250 per unit

- Operating weeks per year: 52

- EOQ: Approximately 179.61 units

- Annual Holding Cost: Approximately $449.03

- Annual Order Cost: Approximately $448.80

- Annual Total Inventory Cost: Approximately $897.83