Exam 6: Designing Global Supply Chain Networks

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,

What type of network design is represented in the diagram?

A recently-accredited College of Business discovers it is in dire financial trouble and wants to examine demand for services and costs to provide them next year.Market conditions may become more favorable,resulting in a 10% increase in enrollment,with a probability of 0.5,stay the same,with a probability of 0.3,or become less favorable,with a probability of 0.2 and a decrease in enrollment of 10%.There is a 0.9 probability that their costs to provide services will rise by 5% and a 0.1 probability that their costs will be the same.This year,they charge each of their 2000 students $3000 to take a full course load and spend $1500 on each student. -What is the expected profit for the college?

Simulation methods are very good at evaluating decisions when

Scenario 6.1 - The Big Box Bahouth Ltd.is planning for the next two years of production and debating whether to construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck bays.The cost to build the large facility is $2 million and the cost to build the small one is $1.2 million.If they construct a large facility and demand is as high as they hope,then operating costs are $450,000 annually.If they construct a large facility and demand is low,then operating costs are $300,000.If they construct a small facility and demand is low,the operating costs are $275,000 but if they experience high demand,the operating cost of a small facility increases to $600,000.After having conducted some market research,they feel that the likelihood of high demand is 0.7 and the likelihood of small demand is 0.3. -Use the information from Scenario 6.1 to determine the expected cost of operating a small facility for a period of two years.

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,

For a global supply chain,exchange rates and inflation are

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.

In a complex decision tree there are

Uncertainty of demand and price

What type of network design is represented in the diagram?

The opportunities from globalization are often accompanied by

Strategic planning and financial planning should be combined during supply chain network design.

The NPV (net present value)of a cash stream that is equal to $75 per period for 5 periods with a rate of return of 15% per period would be

The decision with the highest NPV (net present value)will provide a supply chain with

Appropriate flexibility is an effective approach for a global supply chain to deal with a variety of risks and uncertainties.Extra flexibility is always worth the cost.

Scenario 6.1 - The Big Box Bahouth Ltd.is planning for the next two years of production and debating whether to construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck bays.The cost to build the large facility is $2 million and the cost to build the small one is $1.2 million.If they construct a large facility and demand is as high as they hope,then operating costs are $450,000 annually.If they construct a large facility and demand is low,then operating costs are $300,000.If they construct a small facility and demand is low,the operating costs are $275,000 but if they experience high demand,the operating cost of a small facility increases to $600,000.After having conducted some market research,they feel that the likelihood of high demand is 0.7 and the likelihood of small demand is 0.3. -Use the information from Scenario 6.1 to determine the total (operating and building)cost of the best alternative for a two year period.

A recently-accredited College of Business discovers it is in dire financial trouble and wants to examine demand for services and costs to provide them next year.Market conditions may become more favorable,resulting in a 10% increase in enrollment,with a probability of 0.5,stay the same,with a probability of 0.3,or become less favorable,with a probability of 0.2 and a decrease in enrollment of 10%.There is a 0.9 probability that their costs to provide services will rise by 5% and a 0.1 probability that their costs will be the same.This year,they charge each of their 2000 students $3000 to take a full course load and spend $1500 on each student. -What is the profit for the college if it experiences a decrease in enrollment and an increase in their cost to provide services?

A negative NPV for an option indicates that the option will lose money for the supply chain.

The degree of demand and price uncertainty has