SUPPLY CHAIN MANAGEMENT

2018-1

EXAMEN PARCIAL KEY

SUPPLY CHAIN MANAGEMENT
Instrucciones:
 Al término del examen se devolverán las hojas de enunciados.
 El uso de útiles es personal. No se permite el uso de ningún tipo de apuntes.
 Redacte todas sus respuestas en el cuadernillo.
 Escriba con lapicero y no con lápiz
 Trabaje con orden y limpieza.
 Durante la evaluación, los celulares deben permanecer apagados.
 Duración: 120 minutos
 Fecha: 08.10.2018
Note: This test will be written and answered in English, please write clearly and concisely. Pay attention to
proper grammar and spelling. Total Marks: 100

PART I: THEORY

OBJECTIVE: To recall key concepts of Supply Chain Management

A. MULTIPLE CHOICE QUESTIONS 18 MARKS
Answer the following questions:

1. Production can utilize forecasts to make decisions concerning

a. sales-force allocation.
b. scheduling.
c. promotions.
d. new product introduction.
e. budgetary planning.

2. One of the characteristics of forecasts is

a. forecasts are always right.
b. forecasts are always wrong.
c. short-term forecasts are usually less accurate than long-term forecasts.
d. long-term forecasts are usually more accurate than short-term forecasts.
e. none of the above

3. In general, the further up the supply chain a company is (or the further they are from
the consumer),
a. the smaller the distortion of information they receive.
b. the information they receive is more accurate.
c. the greater the distortion of information they receive.
d. the information they receive is more useful.
e. none of the above

4. Which of the following is not a component of facilities decisions?

a. Location
b. Capacity
c. Operations methodology
d. Warehousing methodology
e. All of the above are components of facilities decisions.

5. The warehousing methodology that uses a traditional warehouse to store all of one
type of product together is

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a. warehouse unit storage.

b. stock keeping unit (SKU) storage.
c. job lot storage.
d. cross-docking.
e. none of the above

6. Which of the following is not an obstacle to achieving strategic fit?

a. Increasing variety of products
b. Decreasing product lifecycles
c. Increasingly demanding customers
d. Consolidation of supply chain ownership
e. none of the above

OBJECTIVE: To recall key concepts of SCM through cases analyzed in class

B. TRUE/FALSE 7 MARKS

1. Analyze the following statements and determine if they are TRUE or FALSE.

1. In the Tag Line, in relation to the driver facilities, the company applies the concept F
of responsiveness.
2. In the company Exceso, from the case A Pain in the Supply Chain, one of the main F
problems was the lack of responsibility of the managers.
3. The Tag Line was an e-business focus on the sales of T-shirts. F

4. The lack of focus on customer needs was one of the main problems the company T
Exceso is facing.
5. We can infer that the company The Tag Line failed because its managers did not T
take into consideration the capabilities of the supply chain in a larger scale.
6. The company Excesso rewards its sales representatives based on Sell-Through F

7. In the Tag Line, in relation to the driver inventory, the company applies the concept T
of efficiency.

PART II: CASE STUDIES AND INTERPRETATION 50 MARKS

Answer the following questions:

OBJECTIVE: To recall key concepts of Demand Forecasting.

1. Answer the following questions about Demand Forecasting 10
marks

QUESTION ANSWER
What role does 1. Forecasting is the basis for all strategic and planning decisions in a
forecasting play in supply chain
the supply chain

2. Forecast is used to predict future demand, which determines the

quantity of each components and inventories needed

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Why is it unlikely to 3. Forecasts are always wrong, hence, an estimate of error should be
have a forecast of provided with the forecast.
historical demand
without any forecast
error?
4. Accuracy depends on the data and method to produce results and
even with the most recent and up-to-date data unlikely that a 100%
accurate would occur.

Forecasts should 5. heating oil, electricity, natural gas, wrapping paper, school supplies,
take into account sporting goods (summer, winter, etc.), turkey, paneton
seasonality. Give 2
examples of
products with high
seasonality. 6. facial tissues, beverages (coffee, beer, iced tea, etc.), ice cream, pizza
delivery, and tax preparation services.

Name the three 7. Level, the current deseasonalized demand;

systematic
components of a 8. Trend, the rate of growth or decline in demand for the next period;
demand forecast?
9. Seasonality, the predictable seasonal fluctuations in demand.

What is 10. Collaborative forecasting requires all supply chain partners to share
collaborative information regarding parameters that might affect demand, such as
forecasting? the timing and magnitude of promotions.

OBJECTIVE: To recall key concepts of SCM Green Supply Chain

2. Answer the following questions about Green Supply Chain Case Comet and
Wincanton: 10
Marks

Question Answer
Were the reasons or competitive 1. Legal reforms in the EU such as the Waste
drivers that lead to Comet Electrical and Electronic Equipment Directive
needing to implement a more (WEEE) required firms like Comet to take back
complete reverse supply chain? and recover products after use to reduce waste
volumes

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What type of returns business 2. Open loop using a 3rd party for some of the
model is described in the case? recycling and transportation.

What were the aims of Comet’s 3. Reduce Comet’s carbon foot print
reverse supply chain operations?

4. Utilize existing infrastructures

5. Embed recycling and Wincanton’s role in Comet’s

operations

What measures can we use to 6. Reduced greenhouse gas emissions

evaluate Comet and Wincanton’s
partnership?
7. Reduced waste

8. Reduced energy consumption through efficient

use of transport – May write reduced water
consumption ½ mark

What were some of the 9. Co-ordinate transport to have more efficient

challenges that Comet and scheduling and use of trucks
Wincanton had overcome to
opérate a successful reverse and
Green supply chain?
10. Ensuring efficient use of the distribution centre –
moving goods to recycling quickly and sort
effectively.

OBJECTIVE: To recall key concepts of Strategic Fit

3. Answer the following questions about Strategic Fit 10 marks

Question Answer
What is strategic fit? 1. It is the consistency between customer priorities
and the competitive strategy and the supply
chain capabilities specified by the supply chain.

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From a customer perspective 2. When the customer’s range of quantity required

name 3 factors that increase increases,
implied uncertainty?

3. When lead times decrease, or when rate of

innovation increases

4. When variety of product increases, or when

required service levels increase.

A later life cycle stage product will 5. Stable demand.

more likely have a more efficient
supply chain for what reasons?
6. Low margins

7. Price is important

Name two problems that can arise 8. High inventories or poor quality,
when each stage of a supply chain
focuses solely on its own profits
when making decisions? 9. low customer service or increased returns
A store that provides a wide variety 10. Responsive as they need to provide highly
of quality fashion items to select innovative fashion products, excellent customer
customers who value luxury and service, and high service levels.
exclusive brands would have
which type of supply chain?

OBJECTIVE: To recognize key elements and concepts of supply chains

3. Short Case: WalMart Supply Chain 20 marks

The American company WalMart is the largest retailer in the world. The company has thousand
stores around the world and in the United States it is everywhere. One of the main requirements
to set up a store in a specific location is that this has to be located nearby a Distribution Center.
Each Distribution Center replenishes a set of stores, applying the principle of centralization. To
distribute its products across the supply chain, WalMart applies the warehousing methodology
known as Cross-docking. The WalMart trucks go to manufacturers’ facilities to collect the
merchandise and return to the distribution center with the merchandise in bulk. At the
distribution center, items are reorganized rapidly using automation, and delivered to stores
through small trucks or vans, also owned by WalMart.

In stores, considering mass consumption products, WalMart stores small amounts of inventory
and uses frequent replenishment to provide availability to its customers. The company owns a
huge number of trucks that moves the products from manufacturers to distribution centers, and
from distribution centers to stores. WalMart has invested huge amounts of money to develop a
very standardized and effective transportation system to link all its operations. In relation to
pricing, the company applies an edlp (everyday low pricing) strategy, because mainly it works
with low-cost sources. Chinese suppliers are the main source when bringing products from
abroad. In order to monitor these operations effectively and in real time, WalMart uses the latest

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satellite system that supervises and controls what is happening in stores, distribution centers
and trucks all around the world.

Questions:

a. Draw the supply chain for WalMart, identifying clearly each of the stages. 10
marks

b. Complete the following table in relation to the company WalMart: 10 marks

Driver Focus on efficiency Brief explanation?

or responsiveness?
Inventory Efficiency WM do not hold stock in stores/small amounts of
inventory
Facilities Efficiency Centralization of DC
Responsiveness Stores are everywhere
Transportation Responsiveness WM manage its own fleet/ they apply the latest
technology/Huge investment.
Sourcing Efficiency Low cost sources/Mostly gets products from
China.
Information Responsiveness Huge investment/ monitors everything with the
latest technology.

PART III: PRACTICAL QUESTIONS 20 MARKS

OBJECTIVE: To apply the concepts of aggregate planning to specific situations.

1. Imagine that you are the assistant to the manager of manufacturing and need to
develop different scenarios for the production plan. What is the best production plan?
You have the following data:

Production Costs
Starting inventory = 0 Production Cost = $100 per unit

No specific Ending Inventory Target Hiring = $30 per worker

Each worker can produce 10 units Firing = $70 per worker

per month.
N° of workers at the beginning= 11 Inventory = $20 per unit

Backorder = $50 per unit

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a) Analyse the situation using the Chase Strategy to produce the required demand (in
units) for the following six months. 10 marks

Total Regular Overtime

Month Demand Production Workers Inventory Backorder Production Production Subcontract Hire Fire
1 600
2 900
3 1200
4 2000
5 1400
6 800

Cost: _________________

b) Analyse the situation using the Level Strategy to produce the required demand (in
units) for the following six months. 10
marks
Hiring or firing is allowed only at the beginning of period 1.

Cost: ________________

c) Which strategy is more suitable? 2marks

Chase as it costs less

d) Using the data from the aggregate plan, explain the advantages of the most suitable
strategy 3marks

Chase is used when labour flexibility costs are low and there is sufficient labour
available. Here hiring costs and firing costs are less than $100 per person making labour
capacity change quite cheap. In the level strategy, the inventory costs are also low, but
exceed the labour capacity costs of chase.

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END OF THE TEST

Chart of Specifications of Assessment

Part Description of Question Items Score Score per Total

Item (%) Score
Part I A Multiple Choice Questions 6 18 marks 18% 3.6
Part I B TRUE/FALSE 7 7 marks 7% 1.4

Part II 1. Demand Forecasting 10 10 marks 10% 2.0

Part II 2. Green Supply Chain Case 10 10 marks 10% 2.0

Comet and Wincanton
Part II 3. Strategic Fit 10 10 marks 10% 2.0

Part II 4. Short Case: WalMart 2 20 marks 20% 4.0

Supply Chain
Part III Practical Questions: 3 25 marks 25% 5.0
Aggregate Planning
TOTAL 23 100 marks 100% 20.0

SCM team / Apr ‘18