Supply Chain Management Assignment-2

Due date: 21/10/2014 Chapters: 4,5,6Instructions for Submitting your Assignments1. Type your name and your ID number 2. Print them out for reviewing and grading.3. Read the textbook for the course before answering any question.4. Multiple choices; Choose the most accurate choice 5. Essay questions: hand writing only6. Submit your assignments before the due dateName ID#.......................................................Chapter 4True/ False1. Distribution occurs between every pair of stages in the supply chain.Answer: 2. Companies in the same industry should always select similar distribution networks, because their objectives will be similar.Answer: 3. Outbound transportation costs per unit tend to be lower than inbound costs, because inbound lot sizes are typically larger.Answer: 4. The main advantage of in-transit merge over drop-shipping is the somewhat lower transportation cost and improved customer experience.Answer: 5. A distribution network designer needs to consider product characteristics as well as network requirements when deciding on the appropriate delivery network.

Multiple Choice Questions1) The steps taken to move and store a product from the supplier stage to a customer stage in the supply chain is referred to asa. transportation.b. retailing.c. wholesaling.d. distribution.e. manufacturing.2) The choice of the distribution network can be used to achieve supply chain objectives such asa. low cost.b. high responsiveness.c. high cost.d. high responsibility.e. A and B only

3) A poor/inappropriate distribution network can a. lead to high profitability.b. hurt the level of service customers receive while increasing cost.c. have a significant negative impact on the profitability of a firm.d. all of the above e. B and C only

4) Which of the following are measures of customer service that are influenced by the structure of the distribution network?a. Returnabilityb. Order visibilityc. Customer experienced. Product availabilitye. all of the above 5) The ease with which the customer can place and receive their order as well as other aspects of value that the sales staff provides isa. customer experience. b. order visibility.c. product availability.d. response time.e. returnability.

6) The costs incurred in bringing material into a facility area. sourcing transportation costs.b. outbound transportation costs.c. crossbound transportation costs.d. inbound transportation costs.e. none of the above7) As the number of facilities in a supply chain increasesa. the inventory and resulting inventory costs also increase.b. the inventory and resulting inventory costs decrease.c. the inventory increases and resulting inventory costs decrease.d. the inventory decreases and resulting inventory costs increase.e. the inventory and resulting inventory costs remain the same.

8) As the number of facilities in a supply chain increases, total facility costsa. decrease. b. remain the same.c. increase.d. increase to a point and then decrease.e. decrease to a point and then increase.

9) Which of the following is not a distinct distribution network design that may be used to move products from factory to customer?a. Manufacturer storage with direct shippingb. Manufacturer storage with distributor pickupc. Distributor storage with package carrier deliveryd. Distributor storage with last mile deliverye. Manufacturer/distributor storage with customer pickup10) ________ is a service factor performance characteristic of Manufacturer or Distributor Storage with Customer Pickup that is lower than other options because of the lack of home delivery. Experience is very sensitive to capability of pickup location.a. Response timeb. Product varietyc. Customer experienced. Time to market Essay Questions

1. Total logistics costs are the sum of inventory, transportation, and facility costs for a supply chain network. What occurs as the number of facilities increases?

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..Chapter 5True/False

1. Supply chain network design decisions include the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility.Answer: 2. Facility location decisions have a long-term impact on a supply chain's performance because it is cost effective to shut down a facility or move it to a different location.Answer: 3. The allocation of supply sources and markets to facilities has a significant impact on performance because it affects total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand.Answer: 4. Network design decisions have a significant impact on performance because they determine the supply chain configuration and set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness.Answer: 5. If the production technology is very inflexible and product requirements vary from one country to another, a firm has to set up local facilities to serve the market in each country.Answer: Multiple Choice Questions1. Supply chain network design decisions includeb. only the location of manufacturing, storage, or transportation-related facilities.c. only the allocation of capacity and roles to each facility.d. both the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility.e. neither the location of manufacturing, storage, or transportation-related facilities nor the allocation of capacity and roles to each facility.f. none of the above 2. Supply chain network design decisions classified as facility location are concerned witha. what processes are performed at each facility.b. where facilities should be located.c. how much capacity should be allocated to each facility.d. what markets each facility should serve and which supply sources should feed each facility.e. none of the above 3. Facility location decisions have a long-term impact on a supply chain's performance becausea. it is very expensive to shut down a facility or move it to a different location.b. it is not expensive to shut down a facility or move it to a different location.c. it is advisable to shut down a facility or move it to a different location.d. it is cost effective to shut down a facility or move it to a different location.e. none of the above 4. The allocation of supply sources and markets to facilities has a significant impact on performance becausea. it cannot affect total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand.b. it cannot affect customer demand.c. it affects total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand.d. it cannot satisfy customer demand.e. none of the above 5. Network design decisions have a significant impact on performance because theya. determine the supply chain configuration.b. determine the supply chain conflagration.c. set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness.d. set constraints within which inventory, transportation, and information can be used to either increase supply chain cost or decrease responsiveness.e. A and C only 6. Firms focusing on responsiveness tend toa. locate facilities close to the market they serve.b. locate facilities very far from the market they serve.c. find the lowest cost location for their manufacturing facilities.d. select a high-cost location to be able to react slowly.e. none of the above7. A facility built because of tax incentives, local content requirement, tariff barriers, or high logistics cost to supply the region from elsewhere with the objective to supply the market where it is located isa. an offshore facility.b. a source facility.c. a server facility.d. a contributor facility.e. an outpost facility. 8. If the production technology is very inflexible and product requirements vary from one country to another, a firm has to set upa. local facilities to serve the market in each country.b. a few high-capacity facilities to serve the market in each country.c. many local facilities because this helps lower transportation costs.d. a few high-capacity facilities because this helps lower transportation costs.e. many high-capacity facilities because this helps lower transportation costs. 9. Total logistics costs are a sum of the a. inventory and facility costs.b. transportation and facility costs.c. inventory and transportation costs.d. inventory, transportation, and facility costs. e. inventory, transportation, and faculty costs. 10. The objective of the second phase of network design is toa. maximize total profits, taking into account the expected margin and demand in each market.b. select a precise location and capacity allocation for each facility.c. select a set of desirable sites within each region where facilities are to be located.d. identify regions where facilities will be located, their potential roles, and their approximate capacity.e. specify what capabilities the supply chain network must have to support a firm's competitive strategy. Essay Question

Describe the factors that influence supply chain network design decisions

..Chapter 6

True/Falsea. Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space, cannot be altered in the short term.Answer: 2. Long-term contracts for both warehousing and transportation requirements will be more effective if the demand and price of warehousing do not change in the future or if the price of warehousing goes up.Answer: 3. The present value of a stream of cash flows is what that stream is worth in today's dollars.Answer: 4. The decision with the lowest NPV will provide a supply chain with the highest financial return.Answer: 5. A logical objection to both the multiplicative and additive binomial is the fact that the underlying factor takes on two values at the end of each period.Answer: Multiple Choice Questions1. Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space,a. can be altered in the short term.b. cannot be altered in the short term.c. cannot be altered in the long term.d. can only be altered in the short term.e. all of the above2. Short-term contracts for both warehousing and transportation requirements will be more effective a. if the demand and price of warehousing do not change in the future.b. if the price of warehousing goes up in the future.c. if either demand or the price of warehousing drops in the future.d. only if demand drops in the future.e. only if the price of warehousing drops in the future.3. A firm may choose to build a flexible global supply chain even in the presence of little demand or supply uncertainty ifa. certainty exists in both exchange rates and prices.b. certainty exists in exchange rates or prices.c. uncertainty exists in both exchange rates and prices.d. uncertainty exists in exchange rates or prices.e. uncertainty exists only in exchange rates. 4. The discount factor used to obtain the present value of money in the next period where k represents the rate of return isa. k.b. 1+k.c. 1/(1+k).d. k /(1+k).e. none of the above 5. What is the present value of a $27 revenue that will be received in one year where the rate of return is 8% (.08)?a. $2.50b. $15.00c. $25.00d. $30.00e. none of the above6. The NPV (net present value) of a cash stream that is equal to $100 per period for 5 periods with a rate of return of 10% (.10) per period would bea. 379.08.b. 416.98.c. 500.00.d. 610.51.e. 671.567. A decision tree isa. a graphic device used to evaluate decisions under certainty.b. a graphic device used to evaluate decisions under uncertainty.c. a tabular device used to evaluate decisions under certainty.d. a tabular device used to evaluate decisions under uncertainty.e. none of the above8. A major factor that makes the decision tree methodology quite powerful isa. the choice of certainty.b. the choice of discount rate.c. the choice of uncertainty level.d. the choice of additive factor.e. all of the above 9. One of the best ways to speed up the process of financial analysis and arrive at a good decision is toa. use estimates of inputs when it appears that finding a very accurate input would take an inordinate amount of time.b. use estimates backed up by sensitivity analysis when it appears that finding a very accurate input would take an inordinate amount of time.c. use estimates of inputs except when it appears that finding a very accurate input would take an inordinate amount of time.d. make sure that every detail is very accurate.e. none of the above

Essay Question

1. Summarize the steps in the decision tree analysis methodology.2. The XYZ Company has a choice between two warehouses. A lease at location A costs $1000 per month with a payment of $2000 up front to guarantee the 3 year lease. Location B would cost $1200 per month and would be leased from month to month. The anticipated revenue in either location is $1500 per month. The estimated rate of return is 10% per year. Using net present value, determine which location would be the better choice.

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