Exam 9: Supply Chain Design

Explain about a supply chain.

A great servicescape and facility layout can usually overcome a poor location decision.

Both economic and noneconomic factors should play an important role in location decisions in supply and value chains.

A push system _____.

The basic purpose of a supply chain is to coordinate communication among employees and customers in order to maximize customer satisfaction.

A major grocery chain desires to build a facility in a city with three distinct market demographic segments. The number of possible customers in each segment and the central location coordinates of the segments are given below. Using the center-of-gravity method for the best location, identify the TRUE statement. Market Segment Location Coordinates , Number of Customers 1 15,18 2,500 2 2,13 3,200 3 8,10 3,900

A manufacturer is considering some expansion alternatives. One is to increase the capacity at their current location. A second set of alternatives is to build a new plant at one of two possible locations. The projected operating costs have been estimated as follows: Expand at Current Cost Category Location Location A Location B Fixed \ 125,000 \ 225,000 \ 175,000 Direct labor per unit \ 32.5 \ 30 \ 33 Direct material per unit \ 16 \ 17 \ 15.50 Overhead cost per unit \ 2.90 2.40 \ 2.50 Transportation cost per 100 units \ 125 \ 100 \ 110 If the forecast of additional demand for the next year is 25,000 units, which alternative should be selected to minimize costs?

William Green, vice president of manufacturing for Computer Products Corporation (CPC), and his staff are studying three midwestern alternative locations for a new production facility for producing high-resolution scanners. His staff analysts predict that the scanners will be a growing market over the next ten years, and the analysis group shares marketing's enthusiasm for planning facilities for producing this new product line. The analysts have developed these estimates for the three locations: Annual Fixed Costs Variable Cost Location Alternative (Millions of Dollars) per Scanner Cleveland, Ohio \ 3.9 \ 3,400 South Bend, Indiana 3.6 3,700 Grand Rapids, Michigan 3.1 4,000 The marketing department at CPC estimates sales for the scanners will be 1,000 scanners in the first year, 2,000 in the second year, and 4,000 in the third year. a.In what range of production capacity would each of the locations be preferred? b.Use break-even analysis to determine which location would be preferred in Years 1, 2, and 3. Which single location should be chosen, and in what year will CPC break even?

The center-of-gravity method takes all the following into account EXCEPT the:

One disadvantage of VMI is that it does not account for substitutable products from competing manufacturers and often results in higher customer inventories than necessary.

In the supply chain operations reference (SCOR) model, the "plan" step involves identifying and selecting suppliers.

The As-You-Like-It Hamburger Shop is considering adding a new location. The investment at each of the four potential sites is the same. The price they can charge for hamburgers is set by the competition in the area. Given the information below, which site is expected to be the most profitable (i.e., net profit)? Factor Site A Site B Site C Site D Fixed Cost \ 10,000 \ 8,000 \ 6,000 \ 11,000 Variable Cost per Unit \ 0.70 \ 0.70 \ 0.85 \ 0.65 Price per Unit \ 1.30 \ 1.20 \ 1.25 \ 1.10 Forecast Volume (Units) 20,000 22,000 18,000 24,000

Contract manufacturers can provide the benefit of reducing the total costs resulting from economies of scale.

Inventory turnover value tells managers how much of the firm's assets are tied up in inventory.

The "weights (W_i)" typically used in the numerator and denominator of the center-of-gravity computational method is:

Being an entrepreneur, Steve decides to open his own custom flower shop in an area and began to look for possible locations for his store. He just can't play the corporate career game and wants to "just-do-it-yourself." He researches the zip codes in his area and finds the following information: Market Segment Location Coordinates Potential Number of Customers X Y A 4 8 80,000 B 6 3 90,000 C 10 7 120,000 Identify the TRUE statement about the best preliminary location (i.e., the center of gravity) for the possible store location.

In designing an efficient supply chain, an organization would need high levels of inventory stored in many small distribution centers.

_____ is measured by order fulfillment lead time or perfect delivery fulfillment.

A(n) _____ produces goods in advance of customer demand using a forecast of sales and moves them to points of sale where they are stored as finished goods inventory.

The center-of-gravity method determines the best X and Y coordinates (location) for multiple facilities by finding a central location and then assigning the facilities around the periphery of that location.