Exam 24: Supply Chain Management Analytics

Machado Construction is considering two options for its supplier portfolio. Option 1 uses two local suppliers. Each has a "unique-event" risk of 8%, and the probability of a "super-even" that would disable both at the same time is estimated to be 2.5%. Option 2 uses two suppliers located in different countries. Each has a "unique-event" risk of 18%, and the probability of a "super-event" that would disable both at the same time is estimated to be 1.2%. (a) What is the probability that both suppliers will be disrupted using option 1? (b) What is the probability that both suppliers will be disrupted using option 2? (c) Which option would provide the lowest risk of a total shutdown?

In the disaster risk decision tree model, a(n) ________ disrupts all suppliers simultaneously.

What value of the bullwhip measure would indicate that a dampening scenario exists?

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next three years that will disrupt all suppliers as 2%. In addition, the firm currently uses four suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next three years to be 20%. Supplier management costs during this period are $50,000 per supplier. The financial cost incurred if all four suppliers are disrupted at the same time is estimated to be $10,000,000. What is the expected monetary value (cost) of the current supplier diversification arrangement?

Typically, a more expensive shipping option is:

Consider the disaster risk decision tree model. (a) Derive a formula to represent the amount that the probability of all suppliers being disrupted simultaneously, P(n), will increase if the super-event probability S is doubled. (b) Test your formula by computing the amount of increase if the original S equals 1% and there are two suppliers, each with U = 4%.

A company is about to select a vendor for the outsourcing of all of its waste management needs. It has identified four criteria critical to the selection. These criteria, and their importance weights, appear below. Three vendors and their scores are listed below. Which vendor has the highest composite score? Weight Vendor 1 Vendor 2 Vendor 3 Criteria 1 0.32 6 8 5 Criteria 2 0.25 4 1 5 Criteria 3 0.21 7 2 7 Criteria 4 0.22 5 4 4

Which of the following would NOT be considered (in addition to delivery speed) when choosing a mode of transportation?

What is the formula for the bullwhip measure?

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next five years that will disrupt all suppliers as 0.23%. In addition, the firm currently uses three suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next five years to be 1.4%. What is the probability that all three suppliers will be disrupted at the same time at some point during the next five years?

Describe how the U.S. Cash for Clunkers program unintentionally contributed to the bullwhip effect in the automobile industry.

A company is about to select a vendor for the outsourcing of all of its engineering, environmental, and CAD requirements. It has identified four criteria critical to the selection. These criteria, and their importance weights, appear below. Three firms, A, C, and E, have indicated that they are interested in this position. The company has scored each of the three candidates on these criteria, using a 1-10 scale, where 10 is best. Candidate A scored 7, 7, 7, and 5, respectively, on the four criteria. Candidate C scored 9, 4, 8, and 6. Candidate E scored 5, 10, 10, and 7. Which vendor has the highest composite score? Criterion Weight Engineering expertise 40 Financial and managerial strength 20 Integrity 15 Staff experience and qualifications 25

If the variance of orders of a manufacturer equals 800, and the variance of orders of its supplier equals 750, what is happening at this part of the supply chain?

Suppose that a product's value is $1000. The manufacturer experiences a holding cost of 2.5% per month. The firm ships the product across country by truck, and it arrives six days later. The shipping cost is $80 per unit. What is the holding cost on each unit shipped? (Assume 30 days per month.)

A shipment of parts valued at $75,000 needs to be shipped from Thunder Bay, ON to Edmonton, AB. They could be shipped by rail, taking 15 days at a cost of $1,575, or by truck, taking 4 days at a cost of $2,640. The annual holding cost rate for this type of item has been estimated at 22%. What option is more economical?

Which of the following is not an element of the disaster risk decision tree model?

Which of the following is not required information to obtain to conduct the factor weighting technique in supplier selection analysis?

The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from suppliers toward retailers.

In the disaster risk model, as the probability of a super-event (S) increases, the advantage of utilizing multiple suppliers increases.

Choosing suppliers simply based on the lowest bid has become a somewhat rare approach.