For GUTech – Supply Chain & Logistics – Dec 2016

Introduction to Supply Chain Management

Supply Chain Risks and SC Contracts & SLAs

 

 
Assignment 1:  Supply Chain Risks Evaluation 
 

The C+ Coffee Shop in GUTech provide snacks, tea, coffee, and other food related items to the students, 
faculty and staff of GUTech. 
Visit the management of the C+ Coffee Shop and discuss all related risks that could be assigned to the supply 
chain of its services. 
 
Below are points to discuss with the management of the C+ Coffee Shop to evaluate the risks associated to its 
supply chain management. 
1) Fill the answers of the management. 
2) Write a brief report evaluating the risks levels related to the supply chain of this Coffee Shop and how 
you see each risk to be mitigated. 
 

1) Upstream Process
Where and how do you get raw materials and components? Everything from the
number, location and type of suppliers you rely on, as well as the relationship
you have with them, are some key factors in determining supply chain risk.

Sl. Description Yes No Not

Sure
1 Do you rely on a single supplier for 25% or more of your materials?
2 Are 25% or more of your suppliers located within 20km?
3 Is your primary supplier located in an area prone to severe
weather, natural disasters or traffic jams?
4 Do you use a supplier who produces 25% or more of your goods?
5 Do you have a trusted network of backup suppliers or a backup
inventory plan in place?
6 Do you have a formal program in place to ensure the quality of
incoming materials and outsourced products & operations?
7 Do you know who your key suppliers are, and have formal
contracts in place with all of them?
8 Do you use your own transportation and warehousing or outsource
these services?
 2) In Plant Process
Who and what is most critical to your production line? Taking measures to protect key
employees and equipment can help keep the manufacturing process running
smoothly, and mitigate in-plant risk.

Sl. Description Yes No Not Sure

1 Do you run multiple shifts at your shop?
2 Do you process one item or more in your shop to serve
your customers?
3 Are replacements or replacement parts for your most
critical equipment readily available?
4 Impact is not very high on your business if most critical
equipment went down.
5 Have you formally identified the employees who are
most critical to your business operations?
6 Do you have a formal business continuity plan?
7 Do you have policies and procedures in place to
protect your data, intellectual property and critical
equipment from interruptions?
8 Do you conduct formal equipment maintenance and
repair routines?

3) Downstream Process
Who distributes, services and uses your products? Everything from the way you
package, store, transport, market and support your products to the people
who sell, service and buy them is part of the supply chain.

Sl. Description Yes No Not Sure

1 Do you rely on single source for customers for 25% or more of your
business income?
2 Are 25% or more of your customers/sales from one shop?
3 Do you have key customers located in an area prone to severe
weather or natural disasters?
4 Do you have a single distribution center or warehouse from which
you ship all your products?
5 Do you have a backup transportation/logistics plan and provider for
shipping products?
6 Do you have well-documented policies and procedures for product
recalls that include the ability to contact customers directly and a
media response plan?
7 Do you have and regularly review insurance policies with your
agent/broker to help ensure your risks are appropriately covered?
Assignment 2: Economic Order Quantity EOQ 

The Village Shop stocks laptops in its shop at Qurm. It costs the shop RO 300 each time it
places an order with its wholesaler of personal computer. The annual cost of holding cost is RO
120. The shop manager estimates that the annual demand for the laptop will be 1100 units.
Since its order the laptop from Dubai, the ordering time does not include the Fridays (total of 52
days in a year).

Find the optimal order quantity, total minimum cost of inventory, number of orders per year,
and order cycle time.