solution


State whether each of the following statements is true or false, or whether the answer ultimately depends on some other factors (which you should identify).

a. Speed of delivery is an efficiency measure for the transportation driver.

b. Large inventory is a warning sign for poor supply chain efficiency.

c. Location of plants and DCs are tactical decisions.

d. Selection of suppliers is an operational decision.

e. Increasing product variety improves supply chain responsiveness.

f. Increasing inventory turns increases working capital.

g. Increasing days of inventory increases ROA.

h. To decrease supply chain cost, inventory turns should be increased.

i. The Japanese earthquake and tsunami of 2011 were a hazard risk

to the supply chain.

j. Failure of IT systems is considered an operational risk to the supply chain.

k. Operational risks have a more significant impact on supply chain performance than hazard risks.

l. Hazard risks are uncontrollable rare events that disrupt supply chain performance.

m. Functional products are best matched with responsive supply chains.

 
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solution


Consider the following design proposals and financial performance measures for Mighty Manufacturing given in Table 5.39. Both sets of numbers are for 2017 with all possible markets open and plants open in both Denver and Covington. Scenario A has DCs in Denver, Chicago, Pittsburgh, and Atlanta. Scenario B has DCs in Denver,

Consider the following design proposals and financial performance measures for Mighty Manufacturing...

Los Angeles, Portland, Dallas, Chicago, Boston, Pittsburgh, and Atlanta.

a. Which scenario offers better customer service? Why?

b. Which scenario would you suspect has higher transportation costs? Why?

c. Under which scenario is Mighty Manufacturing in a better position if forecasts for new markets are too high? Why?

d. Under which scenario is Mighty Manufacturing in a better position if forecasts for new markets are too low? Why?

 
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solution


Recall Example 5.6 discussed in Section 5.3.7. Determine the ranking of the suppliers using the following methods:

a. L1 norm to scale the criteria values and L1 metric to rank

b. L2 norm to scale the criteria values and L2 metric to rank

Do you find any rank reversals including the rankings obtained in Section 5.3.7? Explain any differences.

Consider a supplier selection problem where the five most important criteria are identified as follows.

C1—Risk

C2—Delivery time

C3—Quality

Recall Example 5.6 discussed in Section 5.3.7. Determine the ranking of the suppliers using the...

C4—Price

C5—Business Performance

a. Using the Borda method and your own preferences, rank the criteria and compute their weights.

b. Suppose 5% of purchasing managers were interviewed and they were asked to rank the above criteria. The summary of their responses are given in Table 5.41.

Determine the weights of the criteria and their rankings based on the sample survey of the purchasing managers, using the Borda method for multiple decision makers discussed in Section 5.3.8. How does their ranking compare with yours?

 
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solution


Suppose you are planning to use single sourcing and have narrowed down the choices to four suppliers A, B, C and D. Your criteria for selection are price (min), company size in market capitalization in millions of dollars (max), and quality on a scale of 1 to 100 (max). The relevant data are given in Table 5.42.

a. Scale the data using the Ideal value method.

b. Use the L∞ metric method to rank the four suppliers.

Consider an order allocation problem under multiple sourcing, where it is required to buy 2000 units of a certain product from three different suppliers. The fixed setup cost (independent of the order

Suppose you are planning to use single sourcing and have narrowed down the choices to four suppliers...-1

Suppose you are planning to use single sourcing and have narrowed down the choices to four suppliers...-2

quantity), variable cost (unit price), and the maximum capacity of each supplier are given in Table 5.43 (two suppliers offer quantity discounts).

The objective is to minimize the total cost of purchasing (fixed plus variable cost). Formulate this as a linear integer programming problem. You must define all your variables clearly, write out the constraints to be satisfied with a brief explanation of each, and develop the objective function.

 
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