Examination Paper of Supply Chain Management
IIBM Institute of Business Management Examination Paper Supply Chain Management Section A: Objective Type (30 marks)
This section consists of Multiple Choice questions& Short Answer type questions. Answer all the questions. Part One questions carry 1 mark each & Part Two questions carry 2 marks each.
Part One: Multiple Choices: 1. When demand is steady, the cycle inventory for a given lot size (Q) is given by a. Q/4 b. Q/8 c. Q/6 d. Q/2 2. There are two firms ‘x’ and ‘y’ located on a line of distance demand(0-1) at ‘a’ and ‘b’ respectively, the customers are uniformly located on the line, on keeping the fact of splitting of ...view middle of the document...
Write a note on “obsolescence (or spoilage) cost”. 5. Define “square law” in safety inventory of supply chain management. 6. What does the word “postponement” signifies in supply chain? 7. What do you understand by the term “tailored sourcing”? 8. Explain the term “outsourcing”. 9. Write a note on “threshold contracts” for increasing agent efforts. 10. What is “dynamic pricing”? 2 IIBM Institute of Business Management
Examination Paper of Supply Chain Management END OF SECTION A
Section B: Caselets (40 marks) This section consists of Caselets. Answer all the questions. Each caselet carries 20 marks. Detailed information should form the part of your answer (Word limit 200 to 250 words).
Orion is a global co. That sells copiers. Orion currently sells 10 variants of a copier, with all inventory kept in finished-goods form. The primary component that differentiates the copiers is the printing subassembly. An idea being discussed is to introduce commonality in the printing subassembly so that final assembly can be postponed and inventories kept in component form. Currently, each copier costs $1,000 in terms of components. Introducing commonality in the print subassembly will increase component cost to$1.025.One of the 10 variants represents 80 percent of the total demand. Weekly demand for this variant is normally distributed ,with a mean of 1,000 and a standard deviation of 200.Each of the remaining nine variants has a weekly demand of 28 with a standard deviation of 20.Orion aims to provide a 95per level of services .Replacement lead time for components is four weeks. Copier assembly can be implemented in a matter of hours. Orion manages all inventories using a continuous review policy and uses a holding cost of 20 percent.
1. How much safety inventory of each variant must Orion keep without component commonality? What are the annual holding costs? 2. How much safety inventory must be kept in component form if Orion uses common components for all variants? What is the annual holding cost? What is the increase in component cost using commonality? Is commonality justified across all variants? 3. At what cost of commonality will complete commonality be justified? 4. At what cost of commonality will commonality across the low-volume variants be justified? Caselet 2 An electronic manufacturer has outsourced production of its latest MP3 player to a contract manufacturer in Asia. Demand for the players has exceeded all expectations whereas the contract manufacturers sell three types of players- a 40-GB player, a 20-GB player, 6-GB player. For the upcoming holiday season, the demand forecast for the 40-GB player is normally distributed, with a mean of 20,000and a standard deviation Dard deviation of 11,000, and the demand forecast for the 6GB player has a mean of 80,000 and a standard deviation of 16,000. The 40-GB player has a sale price of $200, a production cost of $100, and a salvage value of $80 .The 20-GB player has...