Supply Chain Management 6th Edition Sunil Chopra, Peter Meindl - Solutions

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Is a direct selling supply chain without retail stores always less expensive than a supply chain with retail stores?
How does product variety affect the level of inventory a retail store must carry?
Should a firm with an investment in retail stores carry any finished-goods inventory? What are the characteristics of products that are most suitable to be carried in finished-goods inventory? What characterizes products that are best manufactured to order?
Why did Gateway choose not to carry any finished-product inventory at its retail stores?Why did Apple choose to carry inventory at its stores?
Classify the supply chain macro processes in a firm.
Describe the cycle and push/pull views of a supply chain.
Identify the three key supply chain decision phases and explain the significance of each one.
Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm.
Improved cash flows through lesser number of debtors days, increased number of creditors days and decreased number of stock days
Minimisation of total working capital
Competitive procurement of raw material
Focus on fixed asset productivity
Steady implementation of cost cutting practices over the years
Continuous organizational restructuring
Discuss some reasons that we do not see more recycling or remanufacturing of products.
Would you prefer to use Savored or the daily deal? Why?
With Savored, Mr. Chang can limit the number of tables he allows for the discount price. Assuming he makes the same revenue with Savored per discounted table as the daily deal ($15), do you think the ability to limit the number of tables at discount has any advantages? Would you prefer to use
Assume a variable cost of $10 per table and an average spending of $60 per table. With the daily deal ($60 for $30 coupon), Groupon provides Mr. Chang with a revenue of $15 per table. The analysis provided in the New York Times blog indicates that Mr. Chang makes money ($5 per table) through the
Current cost to acquire new customer through advertising
Value of all Groupon subscribers seeing the daily deal
Percentage of new coupon customers who become regular customers
Number of coupons purchased per customer
Percentage of coupons purchased by current customers
Percentage of coupons redeemed
Size of the average sale
Incremental cost of sales
NatBike, a bicycle manufacturer, has identified two customer segments, one that prefers a customized bicycle and is willing to pay a higher price and another that is willing to take a standardized bicycle but is more price sensitive. Assume that the cost of manufacturing either bicycle is $200.
In Exercise 5, imagine that you have chosen Reliable as your supplier. Value Electric wants your business very much and offers you the choice of three mutually exclusive alternatives: reduce lead time by 1 week, reduce the minimum batch to 800, or reduce the standard deviation of lead time to 3
Holding costs are 25 percent, and you must hold a level of inventory corresponding to a cycle service level of 95 percent. You are faced with two suppliers, Reliable Components and Value Electric, that offer the following terms. Reliable sells the transformer for $5,000 with a minimum order of
You are a purchasing manager in charge of stocking a certain type of transformer for a large electric utility. Weekly demand among your field crews for these transformers is normally distributed, with a mean of 100 and a standard deviation of
What other factors should be considered in the choice of transportation mode? What mode would you recommend for each product? Suggest a general framework that Jackie can use across all product categories.
What is the annual cost of using air freight to import decorative hardware? What is the annual cost of using ocean shipping to import decorative hardware?
What is the annual cost of using air freight to import smartphones? What is the annual cost of using ocean shipping to import smartphones?
What are the characteristics of businesses that can succeed with same-day delivery? Can Amazon, Walmart, eBay, or the U.S. Postal Service succeed with same-day delivery? Which is likely to do better? Why?
Why has same-day delivery of pizza been successful, whereas the practice has failed in other settings (e.g., Kozmo.com)?
What changes in the distribution network (if any) would you suggest as both markets grow?
How should Ellen structure distribution from suppliers to the stores in Arizona? What annual savings can she expect?
How should Ellen structure distribution from suppliers to the stores in Illinois? What annual savings can she expect?
What is the annual distribution cost of the current distribution network? Include transportation and inventory costs.
Use a third-party cross-docking facility in Arizona that charged $0.10 per unit for this cross-docking service. This would allow all suppliers to ship product (destined for all 32 Arizona stores) using a large truck to the cross-dock facility, where it would be cross-docked and sent to stores in
Run milk runs using small trucks (capacity of 10,000 units) from each supplier to multiple stores in Arizona. The small truck carrier charged $2,000 per shipment and $50 per delivery. Thus, a milk run from a supplier to four stores would cost $2,200. Milk runs would incur higher transportation
Use direct shipping with small trucks (capacity of 10,000 units) as was currently being done in Illinois. Each small truck charged $2,050 for a shipment of up to 10,000 units from a supplier to a store in Arizona. This was a significantly lower transportation cost than was currently being charged
Walmart designs its networks so a DC supports several large retail stores. Explain how the company can use such a network to reduce transportation costs while replenishing inventories frequently.
Suggest other options that Gary Fisher should consider. Evaluate each option and recommend a distribution system for ALKO that would be most profitable. How dependent is your recommendation on the correlation coefficient of demand across different regions?
What are the savings that would result from following the task force recommendation and setting up an NDC? Evaluate the savings as the correlation coefficient of demand in any pair of regions varies from 0 to 0.5 to 1.0. Do you recommend setting up an NDC?
What is the annual inventory and distribution cost of the current distribution system?
Return to the DoorRed Pharmacy in Exercise 22.For the drug under discussion, DoorRed wants to adjust its ROP from 750 to achieve a fill rate of 99.9 percent. What ROP should it use?
Return to the problem data in Exercise 18.Assume that Motorola follows a periodic review policy. Given lot sizes by sea and air, Motorola would have to place an order every 20 days using sea transport but could order daily using air transport.a. Assume that Motorola follows a periodic review
Each printer costs Epson $200, and the holding cost is 25 percent. What saving in holding cost can Epson expect as a result of building the European DC? If final assembly in the European DC adds $5 to the production cost of each printer, would you recommend the move? Suppose that Epson is able to
Return to the Epson data in Exercise
Weekly demand for detergent at a Walmart store is normally distributed, with a mean of 3,000 and a standard deviation of 700.The store manager continuously monitors detergent inventory and places a replenishment order for 10,000 units when there are 7,000 units in inventory. The supplier takes two
Assume that the Best Buy store in Exercise 3 has a policy of ordering cell phones from Motorola in lots of 500.Weekly demand for Motorola cell phones at the store is normally distributed, with a mean of 300 and a standard deviation of 200.Motorola takes two weeks to supply an order. If the store
Weekly demand for jeans at a Gap store is normally distributed, with a mean of 100 and a standard deviation of 50.The supply plant takes three weeks to supply a Gap order. The store manager monitors its inventory continuously and reorders jeans when the available inventory drops below 350.How
What should Carlos suggest to Vanessa at the upcoming meeting? What are the potential gains for KAR from this suggestion?
Once KAR has reduced its fixed cost per order to 400 real, what are the downsides to leaving the discounting scheme unchanged?
What do you think of the discounting scheme that KAR had used historically? Do you think it was justified given the circumstances?
How does your recommendation impact consignment inventory for MoonChem?
Consider different delivery options and evaluate the cost of each. What delivery option do you recommend for MoonChem?
What is the annual cost of MoonChem’s strategy of sending full truckloads to each customer in the Peoria region to replenish consignment inventory?
TopOil, a refiner in Indiana, serves three customers near Nashville, Tennessee, and maintains consignment inventory (owned by TopOil) at each location. Currently, TopOil uses TL transportation to deliver separately to each customer. Each truck costs $800 plus $250 per stop. Thus, delivering to each
PlasFib is a manufacturer of synthetic fibers used for making furniture upholstery. PlasFib manufactures fiber in 50 colors on one line. When changing over from one color to the next, part of the line must be cleaned, leading to a loss of material. Each changeover costs $200 in lost material and
Harley purchases components from three suppliers. Components purchased from Supplier A are priced at $5 each and used at the rate of 20,000 units per month. Components purchased from Supplier B are priced at $4 each and are used at the rate of 2,500 units per month. Components purchased from
Amazon sells 10,000 Lenovo PCs every month. Each PC costs $500 and Amazon has a holding cost of 20 percent. For what fixed cost per order would an order size of 10,000 units be optimal? For what fixed cost per order would an order size of 2,500 units be optimal?
Amazon sells 20,000 units of consumer electronics from Samsung every month. Each unit costs $100 and Amazon has a holding cost of 20 percent. The fixed clerical and transportation cost for each order Amazon places with Samsung is $4,000. What is the optimal size of the order that Amazon should
A North Face retail store in Chicago sells 500 jackets each month. Each jacket costs the store $100 and the company has an annual holding cost of 25 percent. The fixed cost of a replenishment order (including transportation) is $100. The store currently places a replenishment order every month for
As part of its initiative to implement just-in-time (JIT) manufacturing at the motorcycle assembly plant in Exercise 1, Harley has reduced the number of engines loaded on each truck to 100.If each truck trip still costs $1,000, how does this decision affect annual inventory costs at Harley? What
Suppose Sandra’s fears about increasing outsourcing costs come to fruition and the cost rises to $22/unit for subcontracting. Does this change the decision when the discount is $5?
Which option delivers the maximum profit for the supply chain: Sandra’s plan, Bill’s plan, or no promotion plan at all? Assume starting and ending inventory of 0.2How does the answer change if a discount of $10 must be given to reach the same level of impact that the $5 discount received?
Return to the data for Exercise 5.Assume that Q&H has a third party willing to manufacture detergent as needed for $2,300 per ton. Repeat the analysis for all questions (a) through (e).
Return to the data for Lavare in Exercise 1.Now, assume that a third party has offered to produce sinks at $74 per unit. How does this change affect the optimal production plan without a promotion? How does this change affect the optimal timing of a promotion? Explain the changes.
Consider the data for Lavare in Exercise 1.We now assume that Lavare can change the size of the workforce by laying off or hiring employees. Hiring a new employee incurs a cost of $1,000; laying off an employee incurs a layoff cost of $2,000.a. What is the optimal production plan for the year if we
Lavare, located in the Chicago suburbs, is a major manufacturer of stainless steel sinks. Lavare is in the middle of the demand and supply planning exercise for the coming year. Anticipated monthly demand from distributors over the 12 months is shown in Table 9-4. Capacity at Lavare is governed by
Discuss why the use of subcontractors to handle peak demand can often allow a company to meet demand at lower cost.
Return to the FlexMan data in Exercise 4.The company has signed a service-level agreement with its customers and committed to carry safety inventory from one month to the next that equals at least 15 percent of the following month’s demand. Thus, FlexMan is committed to carrying over at least
FlexMan has identified a third party that is willing to produce routers and switches as needed. The third party will charge $6 per router and $4 per switch. Assume all other data as in Exercise 4, except that hiring and layoffs are allowed as in Exercise 5.a. How should FlexMan use the third party
Reconsider the FlexMan data from Exercise 4.The firm is considering the option of changing workforce size with demand. The cost of hiring a new employee is $700 and the cost of a layoff is $1,000. It takes an employee two months to reach full production capacity. During those two months, a new
FlexMan, an electronics contract manufacturer, uses its Topeka, Kansas, facility to produce two product categories: routers and switches. Consultation with customers has indicated a demand forecast for each category over the next 12 months (in thousands of units) to be as shown in Table 8-11.
Assume that the plant has 1,250 employees and a no-layoff policy. Overtime is limited to at most 20 hours per employee per month. Also assume no subcontracting option. Skycell has a team of 50 people who are willing to work as seasonal employees. The cost of bringing them on is 800 euros per
Reconsider the Skycell data in Exercise
Assume that the plant has 1,250 employees and a no-layoff policy. Overtime is limited to 20 hours per employee per month. A third party has offered to produce cell phones as needed at a cost of $26 per unit (this includes component costs of $20 per unit).a. What is the average per unit of in-house
Reconsider the Skycell data in Exercise
Weekly demand for dry pasta at a supermarket chain is as follows:Estimate demand for the next four weeks using a five-week moving average, as well as simple exponential smoothing with a = 0.2&WBMVBUFUIF."% ."1& .4& CJBT BOE54 in each case. Which of the two methods do you prefer? Why?
Using the A&D Electronics data in Exercise 6, repeat Holt’s model with a = 0. and b = 0.. Compare the performance of Holt’s model with a = 0.0 and b = 0.1. Which combination of smoothing constants do you prefer? Why?
Monthly demand at A&D Electronics for flat-screen TVs are as follows:a = 0.0 and b = 0.1. For the simple exponential smoothing model, use the level at Period 0 to be L0 = UIF average demand over the 12 months). For Holt’s model, use level at Period 0 to be L0 =BOEUIFUSFOEJO1FSJPEUPCF T0 =
For the Hot Pizza data in Exercise 2, compare the performance of simple exponential smoothing with a = 0.1 and a = 0.9. What difference in forecasts do you observe? Which of the two smoothing constants do you prefer?
Consider monthly demand for the ABC Corporation as shown in Table 7-3. Forecast the monthly demand for Year 6 using moving average, simple exponential smoothing, Holt’s model, and Winter’s model. In each case, evaluate the bias, 54 ."% ."1& BOE.4&8IJDIGPSFDBTUJOHNFUIPEEP you prefer?
Quarterly demand for flowers at a wholesaler are as shown. 'PSFDBTURVBSUFSMZEFNBOEGPSZFBSVTJOHTJNQMFFYQPOFOtial smoothing with a = 0.1 as well as Holt’s model with a = 0.1 and b = 0.1. Which of the two methods do you prefer? Why? Year Quarter Demand (5000) 1 98 106 109 IV 133 2 I 130 116 133 IV
Weekly demand figures at Hot Pizza are as follows:&TUJNBUFEFNBOEGPSUIFOFYUXFFLTVTJOHBXFFLNPWing average as well as simple exponential smoothing with a = 0.1&WBMVBUFUIF."% ."1& .4& CJBT BOE54 in each case. Which of the two methods do you prefer? Why? Week Demand ($) 1234567 108 116
Consider monthly demand for the ABC Corporation, as shown in Table 7-3. Forecast the monthly demand for Year 6 VTJOHUIFTUBUJDNFUIPEGPSGPSFDBTUJOH&WBMVBUFUIFCJBT 54 ."% ."1& BOE.4&&WBMVBUFUIFRVBMJUZPGUIFGPSFDBTU TABLE 7-3 Monthly Demand for ABC Corporation Sales Year 1 Year 2 Year 3
8IBUJOGPSNBUJPOEPUIFCJBTBOE54QSPWJEFUPBNBOBHFS How can the manager use this information?
8IBUJOGPSNBUJPOEPUIF.4& ."% BOE."1&QSPWJEFUP a manager? How can the manager use this information?
How should BioPharma have used its production network in 2013? Should any of the plants have been idled? What is the annual cost of your proposal, including import duties?
Moon Micro is a small manufacturer of servers that currently builds its entire product in Santa Clara, California. As the market for servers has grown dramatically, the Santa Clara plant has reached capacity of 10,000 servers per year. Moon is considering two options to increase its capacity. The
Consider a firm such as Ford, with more than 150 facilities worldwide. List the pros and cons of having many facilities and why this model may or may not be suitable for the automobile industry.
Consider a firm such as Apple or Dell, with few production facilities worldwide. List the pros and cons of this approach and why it may or may not be suitable for the computer industry.
McMaster-Carr sells MRO equipment from five warehouses in the United States. W.W. Grainger sells products from more than 350 retail locations, supported by several warehouses. In both cases, customers place orders using the Internet or on the phone. Discuss the pros and cons of the two strategies.
Given that Tiffany stores have thrived with their focus on selling high-end jewelry, what do you think caused the failure of Zales’ upscale strategy in 2006? What products should Zale focus on?
What do you think of Tiffany’s decision to not sell engagement rings online? What do you think of Blue Nile’s growth into the non-engagement category?
What do you think of the fact that Blue Nile carries many stones priced at $2,500 or higher, whereas a large fraction of the products sold from the Tiffany website are priced at around $200? Which of the two product categories is better suited to the strengths of the online channel?
The United States has food service distributors that also replenish convenience stores. What are the pros and cons to having a distributor replenish convenience stores versus a company like Seven-Eleven managing its own distribution function?

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