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Task 1 of 2 - Essay (AC 1.1, 1.2, 1.3, 2.1, 2.2, 2.3, 5.1, 5.2, 5.3)

Instructions:

Choose one organisation and write an essay in which you should use specific examples that:

• Outline the nature of the organisation with a background to its operations.

Critically explain why an effective supply chain is important to all business functions

within the organisation and the key factors to develop an integrated supply chain

strategy.

Evaluate why and how the organisation maintains supplier relationship, before

recommending a supplier relation system to your selected organisation.

• Critically analyse the factors to consider in developing a strategy to improve an

organisation's supply chain.

Assess the use of information technology to create strategies to develop

effective supplier relationships.

Provide two or more options to improve the supply chain of your organisation and

assess their suitability, feasibility, acceptability and benefits before making your

justified recommendation.

Fig: 1


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#1. A North Face retail store in Chicago sells500 jackets each month. Each jacket costs the store $100 and the company has an annual holding cost of 25 percent. The fixed cost of a replenishment order (including transportation) is $100. The store currently places a replenishment order every month for 500 jackets. What is the annual holding and ordering cost? On average, how long does a jacket spend in inventory? If the retail store wants to minimize ordering and holding cost, what order size do you recommend?How much would the optimal order reduce holding and ordering cost relative to the current policy?


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1. The following data were obtained from a recent quarterly report for Dell Computer (in millions): Net revenue $8,028 $6,580 Cost of revenue Inventories: Production materials Work-in-process and finished goods Accounts receivable Accounts payable Calculate the cash-to-cash cycle time for Dell. $126 $224 $2,689 $4,326 2. Obtain from the Internet the current data needed to calculate cash-to-cash cycle time for Dell Computer, Gateway, and Cisco Systems. Calculate the measure for each company and critically evaluate the differences in how the companies operate their supply chains. 3. Evaluate the effect of the following changes that a company makes on cash-to-cash cycle time. Indicate simply the direction of movement of the measurement (i.e., up, down or no change). Reduction in cost-of-goods sold More frequent deliveries from suppliers Reductions in time customers are allowed to pay for goods Change from paying suppliers on receipt of goods to waiting 60 days to pay suppliers Write-off of obsolete inventory Reduction in labor content in a production process Outsourcing the production of a major product 4. Return to the Ajax sandwich example on page 17. Suppose that in addition to the 300 peanut butter and jelly sandwiches to be delivered on Friday, Ajax also needs to make 2,000 sandwiches of other varieties. Assume that the same amount of time is needed to assemble sandwiches and that each parttime student can work for five hours. How many students are needed on Thursday?


1. What will the failure-rate curve look like with incorporating system changes, upgrades, and maintenance? Discuss potential issues involved after each of these activities. What is the role of a logistics system in responding these changes/upgrades/maintenance activities? (12 points)


4. Describe the triple bottom line of sustainability in the context of sustainable procurement. For each pillar,provide one example of unsustainable operation by suppliers and discuss how buying firms can address the issue.


2. The following table shows the life cycle cost summary of a current approach for a system's operations. If you think the cost allocation in this approach is good, explain why it is good. If you do not think it is good, explain how you would change the cost allocation and why your change is better? Discuss the potential issues for implementing this current approach (if you think it is good) or your approach (if you think the current approach is not good). (14 points)


The BNK biotech company purchases a special type of raw material for one of its products calledNLK-15 from a global wholesaler every three months. Emergency shipments can be made between these three-month intervals to resupply when inventory falls short of demand. It takes two weeks to receive the emergency shipments. The customers of BNK are willing to wait this long for a package of NLK-15. However, they will go to another seller if they must wait for the next three-month shipment. Historical data for the customer demand over a three-month interval for the last 10 years is shown below. The cost of holding one pack of NLK-15 for one year is $500. The cost of emergency shipment is$250 per package over and above normal shipping costs. For each of the following questions fully interpret your final results and recommendations for the company. a) How many NLK-15 packages should the company be purchasing every three months? Repeat part (a) if excess demands are back ordered form one period to the next. In this case, the loss-of-goodwill cost is $100 for customers that have to wait until the next three-month period. Also, the bookkeeping expenses for is $50percustomer. c) Assume that if the company is out of stock of NLK-15, the customers will purchase the product from another biotech company. In this case, assume that each NLK-15 package costs an average of $10,000 and sell for an average of $13,500. How many NLK-15packages should the company be purchasing every three months? Ignore loss-of-goodwill costs.


2. A popular brand of tennis shoe has had the following demand history by quarters over a three-year period: 2015 1 2 3 4 Demand 12 25 76 52 2016 1 2 3 4 Demand 16 32 71 62 2017 1 2 3 4 Demand 14 45 84 47 a. Determine the seasonal factors for each quarter by the seasonal decomposition method. b. Based on the result of part (a), determine the deseasonalized demand series. c. Predict the demand for the first quarter of 2018 for the deseasonalized series from a six- quarter moving average.


Operations Group 1) Identify a viable production process to produce 12 million vita bars including mapping the production process and baking equipment needed to achieve volume and quality targets. Bar manufacturing process, equipment and co-packing options are listed in Appendices A and B. 2) Determine the cost of setting up Vita Bar's own production facility versus using a co-packer. A list of equipment needed (can be new or used) along with production capacity and cost should be included. Teams should also identify leading operational constraints that will affect production volume. Coordinating production needs with the ingredients team is essential. 3) The team should articulate labor needed to operate their production system along with identifying production capacity and costs by shift. The team should also identify how many hours of production and shifts they will require to meet 182K, 1M and 12M bar production levels. 4) The operations team should determine warehousing and logistics needs and costs to ramp up Vita Bar distribution across the United States for 12 million bars. Production and/or warehousing will be in one location within the continental United States. Specifically, teams should search on- line for local warehouse purchase versus lease options that would best suit their production decisions. A minimum of 10,000 square feet facility, with office space is needed, if the team elects to produce their own product. A minimum of 2500 square foot warehouse with office space would be needed, if the team selects a copacking option. 5) The team should identify the amount of capital needed for establishing Vita Bar's first production facility and justify their decisions.