Birla Institute of Technology and Science, Pilani

Comprehensive Examination
Second Semester 2005-06
Supply Chain Management (ITEB G621)
Closed Book Date: 09/05/2006 (AN)
Max Mark: 40 Max. Time: 3 Hours

Q1. a) Define supply chain management and Explain why supply chain flows are important.
b) Explain scope of strategic fit.
c) Describe the major obstacles that must be overcome to manage successfully a supply chain.

[1.5+2+2]

Q2. a) Discuss the key issues that should be considered for distribution network decision in practice.
b) Derive the expression for the capacitated plant location model for network design in supply
chain.
c) Discuss the information required for aggregate planning and also mention its output.
d) Mention and explain the ways in which one can tackle supply chain design decisions under
uncertainty in practice.
[2+3+1.5+2]

Q3. Write short note on the following:

a) Revenue sharing contracts

b) Factors for scoring and assessment of suppliers
c) Bullwhip effect
d) Temporal aggregation
[4*1.5]

Q4. a) Discuss how the three supply chain macro processes interface in order to be successful.
b) How does e-business impact the responsiveness of a firm?
[3.5+1.5]

Q5. a) Weekly demand for palms at B&M is normally distributed with a mean of 2,500 and a
standard deviation of 500. The replenishment lead time is two weeks. Assume that the demand
is independent from one week to the next. Evaluate the fill rate resulting from the policy of

1
 ordering 10,000 palms when there are 6,000 palms in inventory. The value of F (1.414) is
0.92.

b) DO sells vitaherb, a popular vitamin diet supplement. Demand for vitaherb is 10,000 bottles
per month. The manufacturer currently charges $3 for each bottle and DO incurs a holding
cost of 20 percent. The manufacturer has offered a discount of $0.15 for all bottles purchased
by retailers over the coming month. Evaluate the number of bottles of vitaherb that DO should
order given the promotion. Determine the forward buy that will occur. It is assumed that the
discount will only offered once, the order quantity without discount is a multiple of order
quantity with discount and DO takes no action to influence customer demand.

c) A European manufacture of industrial furniture has a factory located at Munich and four
warehouses in Western Europe. The warehouses collect customer orders, which then shipped
from the factory. Upon receipt, the warehouse distributes customer orders using small trucks.
Daily demand for a warehouse along with distance from Munich is as shown following.
Warehouse Daily Demand (Kg) Distance (km)
Copenhagen 35,000 1,000
All shipments are by trucks. There are three truck sizes available with capacity 40,000 kg
(small), 60,000 kg (medium) and 80,000 kg large. The combinations of different truck sizes
are not permitted to satisfy the demand. Transportation costs for the three types of trucks are:
Small Medium Large
x
100+0.1 Euros x
125+0.1 Euros 150+0.1 x Euros
x is the distance to be traveled in km.
For replenishment frequency varying between one and four days for the warehouse, identify
the optimal transportation option and the associated cost. What other factors should be
considered before deciding on replenishment frequency?
[5+5+5]

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