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Institute of Business Administration, Karachi


MBA Executive Program
Name: Final Term Examination – December 2020 Seat #:
Supply Chain Management
Mr. Faisal Jalal

Date: 19th December, 2020 Marks:35

Instructions: Attempt ALL questions

Where necessary draw the sketch

Honor Code:
Do your own work: You will complete all examination questions by yourself, using only
your own work. You will not submit the work of any other person or have anyone else submit
work under your name.
No Examination Paper sharing: You will not share examination questions or answers on
the discussion forum or any other website, via email, posting, photocopying or any other
means.
No cheating: You will not engage in any activities that would dishonestly improve your
results, or improve or hurt the results of other learners.
Your actions are logged: Please understand that I will actively monitors logs of all of your
activities using Software.
If any honor code violation is identified, actions will be taken accordingly.

Q#1 You are strongly advised to read carefully and analyse the information in below paragraphs 20
before attempting to answer this Question. Respond according to Marks Allocated against
each part.

 Pick up two competing companies from the FMCG sector. If you have recently done your
grocery you may select item from out of it.

 Identify the different product lines offered/categories by these companies (briefly enlist
product lines and not brands and product names) and pick one product from each company
belonging to the same category (Lifebuoy - Uniliver, Safeguard - Procter & Gamble) means
in total two products from the competing companies same categories

 Select two retailers (one from organized sector and one from the unorganized sector) for the
assignment.

 From each retail store, collect the following data for each of the selected product lines:

 Packing/manufacturing date on stock held at retailer (as per the law, all packaged goods
companies are expected to print manufacturing date/month data on each package)-Take
Pictures Focusing this Information.
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 Expiry/best before date on stock held at retailer- Take Pictures Focusing this Information.

 For better response you may take help from selected products manufacturer’s website,
employees, annual report, books and any other available sources.

Questions:
Assume that you are a supply chain consultant and answer the following questions:
a) Write Vision and Mission of the these companies 0.5

b) What do you consider to be the distinctive competence of these companies? 1.0

Hint: For a and b, the electronic databases can be used to collect the relevant information. Alternatively visit
the company website and collect the required information of respective companies. Also you may get it
from their annual reports or articles on the company.

c) Take Pictures of both Products (Aerial view and side views) 0.5

d) What are your competitive priorities for buying of these products? 1.0

Hint: For d You may get some ideas from below list for Competitive Priorities
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e) What is the Estimated length of chain of each product? 0.5

Hint: For chain length estimate please use the following idea:

f) Compare the time taken by these companies 0.5

g) Compare the time taken by a chain for the organized retailer (Metro, Imtiaz, Naheed) vis-àvis a 1.0
neighbourhood kirana (the unorganized retailer, also known as mom-and-pop stores) store

h) Compare and contrast the time taken in chain for a fast-moving product (e.g. Colgate toothpaste) vis-à-vis 1.0
a slow-moving product (e.g. Colgate-Palmolive shaving cream). (if your selection covers both type of
products)

i) Keeping above comparisons and Supply Chain concepts in mind write brief on your understanding and 2.0
takeaways.
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j) Map the Supply Chain of both companies for selected products (Two Separate Maps). (Sketch in Power 6.0
Point or any other Software). Use proper symbols with labelling. (Your sketch must cover Upstream/Mid
Stream/Down Stream – Cycle View, Push Pull View and Systems Approach, and Integrated Approach).

Hint: For j Please refer below pictures for reference purpose only, whereas my requirement is much more
details.

k) Draw the Facility View for both supply chains (Based on your best knowledge and understanding) 0.5

l) Draw the Cost – Value Curve for both supply chains 0.5

m) Identify the decoupling point in the map. Justify 0.5

n) Identify possible causes of Supply chain disruptions in both cases. 1.5

o) Map your products at below chart, please justify 0.75


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p) Where will you place your product in below map, please justify your selection of quadrant. 0.75

q) What communication channels available for customers and consumers to communicate with the 0.75
firm? Mention details.
r) Describe the role of pricing in your selected products from two different channels. Also make 0.75
comparison with online price, if available.

Q#2 You are strongly advised to read carefully and analyse the information in below paragraphs 7.5
before attempting to answer this Question. Respond according to Marks Allocated against
each part.

Case Problem: PRODUCTION STRATEGY

Better Fitness, Inc. (BFI), manufactures exercise equipment at its plant in Freeport, Long Island. It
recently designed two universal weight machines for the home exercise market. Both machines use
BFI-patented technology that provides the user with an extremely wide range of motion capability
for each type of exercise performed. Until now, such capabilities have been available only on
expensive weight machines used primarily by physical therapists.

At a recent trade show, demonstrations of the machines resulted in significant dealer interest. In
fact, the number of orders that BFI received at the trade show far exceeded its manufacturing
capabilities for the current production period. As a result, management decided to begin production
of the two machines. The two machines, which BFI named the BodyPlus 100 and the BodyPlus
200, require different amounts of resources to produce.

The BodyPlus 100 consists of a frame unit, a press station, and a pec-dec station. Each frame
produced uses 4 hours of machining and welding time and 2 hours of painting and finishing time.
Each press station requires 2 hours of machining and welding time and 1 hour of painting and
finishing time, and each pec-dec station uses 2 hours of machining and welding time and 2 hours
of painting and finishing time. In addition, 2 hours are spent assembling, testing, and packaging
each BodyPlus 100. The raw material costs are $450 for each frame, $300 for each press station,
and $250 for each pec-dec station; packaging costs are estimated to be $50 per unit.

The BodyPlus 200 consists of a frame unit, a press station, a pec-dec station, and a legpress station.
Each frame produced uses 5 hours of machining and welding time and 4 hours of painting and
finishing time. Each press station requires 3 hours machining and welding time and 2 hours of
painting and finishing time, each pec-dec station uses 2 hours of machining and welding time and
2 hours of painting and finishing time, and each legpress station requires 2 hours of machining and
welding time and 2 hours of painting and finishing time. In addition, 2 hours are spent assembling,
testing, and packaging each Body-Plus 200. The raw material costs are $650 for each frame, $400
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for each press station, $250 for each pec-dec station, and $200 for each leg-press station; packaging
costs are estimated to be $75 per unit.

For the next production period, management estimates that 600 hours of machining and welding
time, 450 hours of painting and finishing time, and 140 hours of assembly, testing, and packaging
time will be available. Current labor costs are $20 per hour for machining and welding time, $15
per hour for painting and finishing time, and $12 per hour for assembly, testing, and packaging
time. The market in which the two machines must compete suggests a retail price of $2400 for the
BodyPlus 100 and $3500 for the BodyPlus 200, although some flexibility may be available to BFI
because of the unique capabilities of the new machines. Authorized BFI dealers can purchase
machines for 70% of the suggested retail price.

BFI’s president believes that the unique capabilities of the BodyPlus 200 can help position BFI as
one of the leaders in high-end exercise equipment. Consequently, he has stated that the number of
units of the BodyPlus 200 produced must be at least 25% of the total production.

Questions:
Managerial Report
Analyze the production problem at Better Fitness, Inc., and prepare a report for BFI’s president
presenting your findings and recommendations. Include (but do not limit your discussion to) a
consideration of the following items:

1. What is the recommended number of BodyPlus 100 and BodyPlus 200 machines to
produce?

2. How does the requirement that the number of units of the BodyPlus 200 produced be at
least 25% of the total production affect profits?

3. Where should efforts be expended in order to increase profits?

Include a copy of your linear programming model and solution in an appendix to your report.
(Including Excel file and Word File for Model explanation)

Q#3 You are strongly advised to read carefully and analyse the information in below paragraphs 7.5
before attempting to answer this Question. Respond according to Marks Allocated against
each part.

Planners for a company that makes several models of tractors are about to prepare an aggregate
plan that will cover 6 periods. The forecast for next year is:

Planning Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Total


Period
Forecasted ** ** ** ** ** ** *
Demand

* Take last four digits of your ERP ID as total demand. e.g. if your ERP ID is 18320 then total
demand will be considered as 8320, if your ERP ID is 09345 then it will be considered as 9345.
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** Divide total demand among six months as per your choice. Please don’t divide equally for
each month.

Relevant data are:

Production time: 5 hour per unit


Beginning inventory: 0 units
Straight time labor cost: $10 per hour
Safety stock: One-tenth of current month
Workweek: 5 days, 8 hours each day (Monday to Friday, assume no gazetted holidays
during the period from Jan-21 to Jun-21)
Shortage cost: $200 per unit per month
Carrying cost: $50 per unit per month
Hiring cost: $200 per worker
Layoff cost: $150 per worker

Questions:

A) Prepare an aggregate plan and determine its cost for a Level Strategy. Present your plan
with graphical representation. Hint: you may consider below pic as sample. (100% copy is not preferred,
use some innovative graphs and presentation ideas)
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B) After reviewing the plan the planners need to develop an alternative based on the news
that about 50% regular workers have decided to retire. Rather than replace those persons
they would rather stay with a smaller work force and use temporary workers.

Prepare an aggregate plan and determine its cost for a Chase Strategy. Present your plan
with graphical representation. Hint: you may consider below pic as sample. (100% copy is not preferred,
use some innovative graphs and presentation ideas)

C) Explain the cost differences between the two plans.


Hint: (just an example)
Inventory costs went up $250 from $600 to $850
Backorder costs went down $500 from $500 to $0
Total costs went down $150 from $4,700 to $4,550

D) If you were one of the production staff, would you be happy with plan A or Plan B?
Hint: (Just an example)
I will go with B, while I had to work more overtime in the first 4 periods, I got to take time off in the 6th period. Looking
at the impact to me, I worked the same amount of hours over the 6 periods and got paid $100 more than if I had worked
the original schedule. Customers did not have to wait on their orders and the company cost was also $150 less, so it was a
win-win proposition for everyone involved.

---The End---

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