Birla Institute of Technology & Science, Pilani

Work-Integrated Learning Programmes Division

First Semester 2016-2017

Comprehensive Examination
(EC-3 Regular)

Course No. : MM ZG621

Course Title : SUPPLY CHAIN MANAGEMENT
Nature of Exam : Open Book
Weightage : 50% No. of Pages =2
Duration : 3 Hours No. of Questions = 6
Date of Exam : 06/11/2016 (FN)
Note:
1. Please follow all the Instructions to Candidates given on the cover page of the answer book.
2. All parts of a question should be answered consecutively. Each answer should start from a fresh page.
3. Assumptions made if any, should be stated clearly at the beginning of your answer.

Q.1. A Tata Motors dealership has four retails outlets serving the entire Delhi region. Weekly
demand at each retail outlet is normally distributed, with a mean of 25 cars and standard
deviation of 5. The lead-time for replenishment from the manufacturer is 2 weeks. Each
outlet covers a separate geographic area. The Tata Motors dealership is considering the
possibility of replacing the four retail outlets with a single large retail outlet. Assume that
demand in the central outlet is the sum of the demand across the all four regions. The
dealership is targeting a CSL of 90%. Compare the safety inventory in the two options as
the correlation coefficient is -1 , 0 and 1. (Z @ 90 % CSL = 1.29) [10]
Q.2. The demand for the brand X is 20,000 per month. The retailer incurs a ordering cost of
$1000 per order and a holding cost of 10%. The manufacturer charges $3 for each unit of
brand X. Evaluate optimal lot size for the retailer. The manufacturer incurs a fixed setup
cost of $500 per production lot, production cost of $4 per unit and a holding cost of 10%.
What is annual fulfillment and holding cost the manufacturer. How manufacturer and
retailer can increase total supply chain surplus. [10]
Q.3. A company is examining two choices for moving its goods from the plant to its depots in
eastern India: Truck and Rail. The relevant information is as follows:
Transport lead time is 4 and 12 for Truck and Rail respectively. Transportation charges are
Rs 30 and Rs 20. Shipment sizes in units are 500 and 5000 in both options. The company
is planning to ship 20,000 units per year. The cost of the product is Rs 500 per unit.
Assume the inventory holding/carrying cost is 20%.
(a) Which mode of transport should the company choose? [5]
(b) Will your answer change if you realize that time will follow a normal distribution
with a S D of 4 days. [5]
Q.4. Two companies in computer industry, Dell and HP has different supply chain models. List
any two major factors affecting the decision of choosing supply chain models. How do
you differentiate the decoupling point for the mentioned companies. [5]

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Q.5. A Banglore based retail company owns two outlets- one in an up market mall and other a
discount store in Chennai. It has procured 2,000 quantities of a new toy at a unit cost of Rs
300 from China for the Christmas season. The retailer plans to sell the toy at Rs 500 at the
discount store and at Rs 800 in the up market mall during the Christmas season. The
retailer knows that at the discount retailer there is unlimited demand for this new toy but
demand for new toy at the up market mall is likely to be normally distributed with a mean
of 600 and S. D. of 200. As per customer policy, all the leftover toys at the end of
Christmas season will be donated to charity. How many toys should the retailer reserve for
the up market mall retail outlet [10]

Q.6. Many of the big companies do not have a sourcing strategy. Do you agree? What is
sourcing strategy for apparel manufacturing firm in USA selling apparels across USA and
Europe. Show sourcing strategies for the all items classified by the Krajlic's purchasing
portfolio matrix. [5]

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