Exam 12: Supply Chain Design

________ seeks to develop a firm's supply chain to meet the competitive priorities of the firm's operations strategy.

The VP of Finance studied the printing costs at the university and knew it was time for bold, decisive action. The annual fixed cost of printing at the school was $850,000 and the per-page cost was two cents. Fortunately, his brother-in-law happened to own a company that would lease the printers to the university for only $600,000 and charge ten cents per page. At what point would the university be indifferent between owning their printers and leasing their printers?

Scenario 12.2 SAGE Inc. receives too many applications each year for the Global MBA program so they turn to their network of partners for assistance. Nothing in this world is free, of course, so their partners provide quotes that include a per student cost as well as a facilities cost that SAGE would pay regardless of the number of students they sent there. The costs in Rupees ( ) are elegantly summarized in the table below. -Use Scenario 12.2 to answer the question. Determine the ranges for which each alternative is preferable from a total cost standpoint.

Efficient supply chains use low capacity cushions.

Scenario 12.1 You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year. The following table summarizes the details of this make versus buy decision. -Use Scenario 12.1 to answer the question. What is the break even quantity between buying and making?

What's the difference between postponement and channel assembly? Provide examples of both.

The weeks of supply measure will improve if the weekly sales decrease.

The finished goods of one firm may actually be the raw materials for another firm.

A television manufacturer would like to reduce its inventory. To this end, you are asked by the operations manager to assess its inventory level. You have the following information on average inventories from last year's financial statement: Raw materials $1,500,000 Work-in-process $1,200,000 Finished goods $800,000 In addition, the cost of goods sold last year (50 weeks) was $20 million. a. What is its total inventory (measured as weeks of supply)? b. What is its inventory turnover?

________ is a concept whereby some of the final activities in the provision of a service or product are delayed until the orders are received.

The clever wine shop owner held a tasting, accepted customer orders and payments, and then placed an order with the vineyard. Since he paid the vineyard after he received the shipment (and well after he charged his customers), his ________ time was negative.

Compare and contrast efficient versus responsive supply chains.

Customer clothing and the Boeing 787 Dreamliner aircraft are based on standard designs but component production and manufacture of the final product is ________.

There was no reason to build a new call center and hire hundreds of customer service representatives when there were perfectly viable options thousands of miles away. Hence, the company decided to ________ this process.

The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials.

________ is the synchronization of a firm's process with those of its suppliers and customers to match flow of materials, services and information with demand.

The supply chain management department of a major manufacturer pondered a particularly weighty make or buy decision for weeks, ultimately deciding to make, rather than buy. This decision resulted in increased:

Scenario 12.1 You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year. The following table summarizes the details of this make versus buy decision. -Use Scenario 12.1 to answer the question. For what range of output would you prefer to buy?

What are some financial measures of supply chain performance? Which one is the most important and why?

Figure 12.1 This figure represents the impact of supply chain performance on total costs. -Refer to Figure 12.1. The movement from point A to point B indicates the: