Sunteți pe pagina 1din 15

Assignment 2

Barilla, SpA
This assignment should be delivered through the Assignment Section on Canvas before Friday May 15,
23:59 (CEST). Delivery after this date and time will be rejected.

International BA
(IBA) or Dutch BA
(BA)*

FIRST NAME LAST NAME STUDENT NUMBER

*BA students are allowed to write the assignment in Dutch.

You are asked to answer the assignment questions in a copy of this document. Please use the space
below each question until the next question in the assignment.

Please read each question carefully and show us how you calculated your final answer, in case of a
quantitative question or explain it well in case of a qualitative question. Please note: if you only give a
number or a word as an answer without logical motivation, however correct, your answer will not be
acceptable, and you will earn 0 points with it! All submissions will be checked for plagiarism using
Turinitin functionality in Canvas.

At each question you can see how many points it is worth. The total number of points will be scaled to a
grade between 0 and 10.

Please remember that you can only upload a document in pdf format in Canvas. Please do not wait until
the very last moment with uploading your document: if the server is overloaded you may encounter a
serious problem! It is ABSOLUTELY PROHIBITED to send an assignment through email: such emails will
be instantly deleted without even reading the message!

The questions are related to the Barilla SpA case on page 143 of Designing and Managing the Supply
Chain: Concepts, Strategies and Case studies, 3rd edition (Simchi-Levi, Kaminsky and Simchi-Levi,
2000). Read the text carefully before starting answering the questions.

1
1. The case described large order fluctuations observed at Barilla (see Figure 5-3). These
fluctuations have a negative impact on Barilla’s operations. Mention 2 distinct effects
that are observed at Barilla as consequences of these fluctuations. [2 points]

2. Analyze the causes of the mentioned fluctuations. [5 points]


a. Discuss how much of the fluctuation is caused by final customer demand.
b. Mention 2 distinct causes that can be attributed to the Distributors and indicate
how each cause results in the order fluctuations.
c. Mention 2 distinct caused that can be attributed to Barilla and indicate how each
cause results in the order fluctuations.

2
3. Indicate for each of the two causes for the order fluctuations answered to Question 2b
and 2c if and how JITD will eliminate the cause. [4 points]

4. The director of logistics proposes just-in-time distribution (JITD) as a solution to resolve


the order fluctuations in Barilla’s supply chain. Mention 3 arguments that the distributors
mention that are the downsides for them leading to resistance to join the program. [3
points]

3
5. Barilla’s distribution network is divided into multiple channels. With which channel would
you start implementing the JITD concept. Motive your answer. Only one answer is
allowed! [2 points]

4
6. As a Barilla manager, you want to convince your distributor to participate in the new
program. Write a convincing email to your distributor using 3 distinct reasons why your
customers would benefit from JITD? Use 200-300 words in total. [3 points]

5
7. Barilla’s own sales and marketing organization considered JITD as infeasible and/or
dangerous. Consider the following remarks by Barilla’s personnel: [2 points]
a. “Our sales would flatten if we put this program in place.”

What is the motivation for this argument? Do you agree with this statement?
Motivate your answer.

b. “If space is freed up in our distributors’ warehouses when inventories of our own
product decrease, we run the risk of giving our competitors more distributor shelf
space. The distributors would then push our competitors’ product more than our
own, since once something is bought it must be sold.”

Comment on this statement.

6
8. Promotions are a very relevant aspects in the case. There are 2 kind of promotions:
retail promotions done by the retailers to the customers and trade promotions done by
Barilla towards the distributors. [4 points]
a. A major complaint by sales personnel is: “We wouldn’t be able to run trade
promotions with JITD. How can we get the trade to push Barilla product to
retailers if we don’t offer some sort of incentive?” Comment on this statement. Do
you agree with the statement? Motivate your answer.
b. If you want to eliminate forward buying through trade promotions, but still allow
for retail promotions, think about an approach to incentivize distributors to
encourage retailers to make retail promotions.

7
Calculation part
You now take the part of Cortese. In the Excel-file you find the demand data for 3 types of
Pasta (Pasta A-C) and order data for Pasta A for Cortese, the large DO. The data relates to
figures 5-3 and figures 5-4 of the case (but contains data for individual pastas only).
Note: in the Excel sheet, please use for the initial period -20 a starting inventory of 0 and
assume that there are 0 orders prior to period -20.
9. Cortese use a moving average with p=6 to forecast demand. You are now looking at
Pasta A in 2019. The lead time is 2 weeks. To determine the optimal inventory, Cortese
uses a base-stock policy, with a review cycle of 1 week. Target service level is a CSL of
95%.
a. For Pasta A in 2019, calculate the lower bound of the BWE caused by Cortese
and compare this with the actual BWE caused by Cortese for the data provided
in the Excel-file. [2 points]

8
b. If you reduce the lead time for Pasta A to 1 week, how does this affect the lower
bound of the BWE and the actual BWE? To calculate the effect on the actual
BWE, you need to simulate this by using of the excel file (you might need to
adjust the equations). Beside the results on the BWE, please also provide a
graph showing the demand and the order quantities for period 1-52 and provide a
table with the orders of periods 1-10. Also state how you calculated the Up-to-
level exemplarily for periods 7 and 10. [4 points]

Period 1 2 3 4 5 6 7 8 9 10
demand 322 277 322 346 259 290 323 245 241 330
Up-to-level
Order
Inventory
end period

9
c. Cortese now wants to increase the review period for Pasta A to 2 weeks. How
would this affect the lower bound of the BWE? How does this affect the actual
BWE? To calculate this, please use the Excel file and adjust the calculations to
match this new policy. Beside the results on the BWE, please also provide a
graph showing the demand and the order quantities for period 1-52 and provide a
table with the orders of periods 1-10. Also state how you calculated the order
quantity exemplarily for periods 7 and 10. [4 points]
Period 1 2 3 4 5 6 7 8 9 10
demand 322 277 322 346 259 290 323 245 241 330
Up-to-level
Order
Inventory
end period

10
10. You now want to try a new approach for Pasta B and want to keep the order-up-to level
of the base-stock policy constant throughout the year. To do so, you analyze the
historical demand data from 2018 and estimate the mean and standard deviation of the
demand. Based on this you calculate the optimal order-up-to level and keep this
constant for the whole year 2019. Assume a CSL of 90%. The lead time for this Pasta B
is 2 weeks.
a. Calculate the BWE of Cortese if you follow this approach. To do so, calculate the
optimal order-up-to level for the estimated demand distribution and simulate the
order quantities for the year 2019 for Pasta B. Beside the results on the BWE,
please also provide a table with the orders of periods 1-10. Also state how you
calculated the Up-to-level and the order quantities exemplarily for periods 7 and
10. [4 points]

Period 1 2 3 4 5 6 7 8 9 10
demand 107 50 90 86 67 95 72 118 108 134
Up-to-level
Order
Inventory
end period

11
b. Calculate the achieved average Cycle Service Level for the 52 weeks and
compare it with the target Cycle service level. [2 points]

c. What is the reason for the results seen in 10b.? Analyze the data to support your
argumentation. How does this relate to a general problem of using a fixed order-
up-to level? [2 points]

12
11. Barilla claims that the promotions are a key driver for the problems. You don’t trust this
statement and want to analyze it yourself. Take Pasta C to analyze the effect. The
wholesale price of this Pasta is 2.00 € per kilo. CSL for Pasta C is 99%. Holding cost are
15% of the wholesale price per year, with a year having 52 weeks. The average order
quantity for the (S-1, S) policy in the provided data is 100. This can be seen as the
optimal order quantity for the non-discount setting.
a. If Barilla introduces a price promotion in which the price will be discounted by
4%; calculate the optimal order quantity for this discount based on the formula in
the lecture. [2 points]

13
b. Now assume that such promotion is introduced in periods 5, 15, 25, 35, and 45.
Simulate the effect on the order pattern for 2019. To do so, replace the orders
done in the discount periods with the calculated optimal discount quantity. What
is the resulting BWE when using price promotions? Beside the results on the
BWE please also provide a table with the orders of periods 1-10. Also state how
you calculated the order quantity exemplarily for periods 7 and 10. [3 points]

Period 1 2 3 4 5 6 7 8 9 10
demand 97 104 111 98 99 110 101 120 101 102
Up-to-level
Order
Inventory
end period

14
c. Compare the BWE of the different settings (reducing lead time, fixing forecast,
increasing review period, adding price promotions). Rank the BWE for the
different settings compared to the base case in 9a. and discuss the results. [2
points]

15

S-ar putea să vă placă și