supply chain management Flashcards
Robo Boots sells its shoes exclusively to wholesalers. What role do wholesalers play in the corresponding supply chain - from the perspective of Robo Boots? (Multiple answers possible)
- first tier customers
- third tier customers
- downstream customers
- downstream suppliers
- second tier suppliers
- second tier customers
- third tier suppliers
- upstream customers
- upstream suppliers
- first tier suppliers
- first tier customers
- downstream customer
Cow Inc supplies leather to Ohio Leather Inc. Ohio Leather Inc processes leather for shoe production and has Robo Boots as its customer that again sells its shoes exclusively to wholesalers. What role does Cow Inc play in the supply chain from the wholesalers’ point of view? (Multiple answers possible)
- downstream supplier
- downstream customer
- first tier customer
- second tier customer
- second tier supplier
- upstream supplier
- third tier customer
- upstream customer
- first tier supplier
- third tier supplier
- upstream supplier
- third tier supplier
What is the essence of the Postponement strategy?
Group of answer choices
- Consistent use of identical parts and shifting of the Product Configuration Point
- Consistent use of common parts
- Moving the Product Configuration Point downstream
- A better assessment of the needs of individual countries
Moving the Product Configuration Point downstream
What is the major advantage of applying the Postponement strategy?
- Ability to react to booms and recessions in demand for individual countries
- Distribution can be done over a single warehouse
- Products are already configured at an early stage
- Keep target inventory high
Ability to react to booms and recessions in demand for individual countries
Determine the Optimal Order Quantity (which equals the Optimal Inventory Level in this example) and the corresponding Optimal Costs of alarm clocks for CL Technologies on the basis of the specified data - with and without Postponement.
You will find the necessary information in an Excel sheet under the following link: 3.2.c_Postponement_A_Exercise.xlsx
Calculate the values and enter the results requested below rounded to whole numbers.
Without Postponement - Optimal Order Quantity:
???
Without Postponement - Optimal Costs:
???
With Postponement - Optimal Order Quantity:
???
With Postponement - Optimal Costs:
???
A) 44885
B) 91 586
C) 40955
D) 51 077
When is late product configuration not an appropriate strategy?
- If the affected product has a modular structure
- If the final configuration process is extremly time consuming
- With high uncertainty of demand
- With a high added value in the Product Configuration Point
If the final configuration process is extremly time consuming
Moving the Product Configuration Point means…
- a reduction in the risk of product obsolescence.
- an improvement of customer service and delivery capability
- improving customer service and delivery capability, reducing the risk of obsolescence and reducing inventory.
- a reduction in inventory.
- improving customer service and delivery capability and reducing inventories.
improving customer service and delivery capability, reducing the risk of obsolescence and reducing inventory.
What are the potential negative consequences or disadvantages of a late product configuration strategy (Postponement) for a European manufacturer of computer hardware?
Which answers are correct or rather apply best (multiple answers possible):
- Resource-intensive investments in equipment and personnel.
- Employees must be specifically trained to be able to create different product configurations.
- Responsibilities (e.g. for defect resolution) are unclear and processes along the supply chain become more complex.
- The European warehouse must be equipped in a way that different product configurations can be created in the warehouse itself.
all are correct
What characterizes the bullwhip effect?
Which answers are correct or rather apply best (multiple answers possible):
Group of answer choices
- The ever faster changing needs of customers lead to strong fluctuations in demand, so that the capacity of manufacturers is often insufficient and stockouts occur.
- Demand forecasts turn fluctuating demand into more fluctuating orders, which in turn represent demand for the next stage in the supply chain.
- Fluctuations occur along the entire supply chain, and the further one moves in the supply chain from the end customer to the manufacturer, the weaker the fluctuations become.
- Retailers often have a relatively constant demand, wholesalers have bigger fluctuations and manufacturers have even larger fluctuations.
b und d
High fluctuations in demand can lead to the following economical disadvantages (multiple answers possible):
- Low customer satisfaction
- Low availability of the products up to stockout
- Low capacity utilization
- High inventory costs
all are true
What countermeasures can be taken to prevent negative effects of the demand forecast? Select the correct statement(s). (multiple answers possible)
- Share of information: If, for example, discount campaigns of retailers are communicated to manufacturers at an early stage, they can adapt better to the upcoming fluctuations in demand.
- Reduce the number of forecasts: Joint forecasts or VMI (Vendor-Managed Inventory) reduce the risk of creating a Bullwhip Effect.
- Optize forecast quality: The demand forecast in itself is not a problem. However, often inadequate procedures are used in practice. The application of the Moving Average, for example, is particularly problematic.
- Selection of suppliers with short delivery times: The shorter the delivery times, the lower the safety stock can be. In addition, fluctuations in demand that are passed on are also decreasing.
a,b,d
Determine the impact of forecasting on the basis of the following data:3.3.b_Bullwhip_B_Exercise.xlsx
Use the same forecast (Moving Average with T = 3) and estimation methods as in the video example.
- Actual Demand - Mean:
???
- Actual Demand - Variance:
???
- Orders - Variance:
???
- Orders - Mean:
???
- Bullwhip Effect:
???
1: 1’036
2: 43’963
3: 900
4: 336’271
5: 8
Which statement regarding lot size formation (optimizing order quantities) is not correct?
Group of answer choices
- Lot size formation generates variability in demand, even if end customer demand is actually constant.
- Fluctuations increase if lot size optimization is performed at each stage of the supply chain.
- Lots are created taking order costs or setup costs into account.
- Lot size formation generates variability in demand, but only if end customer demand is not constant.
d
What countermeasures can be taken to prevent negative effects of lot size formation? Select the correct statement(s). (multiple answers possible)
Group of answer choices
- Automated Orders: Automation reduces fixed order costs and information is processed more efficently, thus reducing the incentive for larger lot sizes.
- Coordinated Orders: If several retailers coordinate their orders in such a way that the manufacturer has an almost constant demand, there is considerably less variability.
- Price Negotiations: Unit costs should be low to reduce negative effects.
- Coordinated Delivery: It can pay off to transport several products of a manufacturer in one truck in order to reduce the fixed order costs per product.
- a
- b
- d
Which statement regarding manufacturer discounts is not correct?
Group of answer choices
- In practice, fluctuations in demand usually result from price fluctuations.
- Retailers order more until the additional inventory costs exceed the cost savings through discounts.
- With manufacturer discounts, retailers are tempted to order more.
- Retailers tend to order high volumes in case of a discount, but in the following days and weeks they order nothing or significantly less.
- a
What are the remedies to prevent negative effects of manufacturer discounts? Select the correct statement(s). (multiple answers possible)
Group of answer choices
- Intensity: Higher discounts over a longer period of time can reduce fluctuation intensity.
- Alternatives: The combination of short discount campaigns and “Everyday Low Price” makes it possible to set decisive sales impulses and thus compensate for negative supply chain effects.
- Promotion Profitability; Calculate the costs and benefits of the discount: It makes sense to make the costs of discount campaigns transparent in order to decide whether they are worthwhile at all. In the event of fluctuations in demand, costs may be so high that they may overcompensate for the additional revenues resulting from the discount campaign.
- Order (now) vs. Delivery (later): This reduces the negative effects of a discount campaign. Orders can then fluctuate considerably without having a direct influence on production and delivery quantities.
- c
- d
As part of a supply chain simulation, 400 different cost scenarios were calculated, and the resulting total costs were displayed in a three-dimensional graph depending on the parameters Reorder Point and Order Quantity. Which of the following statements regarding the cost trade-offs with regard to supply chain management are true in the given graph?
- At minimum cost, we optimize the trade-off between holding, out-of-stock and ordering costs.
- With increasing order quantity and higher Reorder Point our total costs increase because we have to store surplus goods. Accordingly, ceteris paribus, the total costs increase due to the storage costs.
- With a very small reorder point and a small order quantity, out-of-stock situations often occur which cause disproportionately high total costs due to the stockout costs.
- High order quantities always make sense. This enables us to reduce fixed order costs and optimise costs.
a,b,c
You are the head of purchasing at ComfyTech AG. In practice, you see that the order quantities for the 76GH8 drill vary between 0 and 5 per day. Based on the specified data, determine the interval limits specified in column D to be able to carry out a simulation.
You will find the necessary information in an Excel sheet under the following link: 3.4.a_Simulation_Intro_A_Exercise.xlsx
Demand 2 - Lower Limit (correct value from cell D7):
Demand 3 - Lower Limit (correct value from cell D8):
Demand 4 - Lower Limit (correct value from cell D9):
Demand 5 - Lower Limit (correct value from cell D10):
Demand 2 - Lower Limit (correct value from cell D7):
0.25
Demand 3 - Lower Limit (correct value from cell D8):
0.5
Demand 4 - Lower Limit (correct value from cell D9):
0.8
Demand 5 - Lower Limit (correct value from cell D10):
0.95
You are CEO of Simkin Hardware and you want to simulate demand and orders for the EF241215 drilling machine to ultimately optimize costs.
Determine the data for days 2 to 25.
You will find the necessary information in an Excel sheet under the following link: 3.4.b_Simulation_Model_1_A_Exercise.xlsx
monthly cost?
XXX
363
Please simulate the demand in column E and the delivery time in column L.
Which formula belongs in cells E4 to E28 to simulate demand?
“=LOOKUP(RAND(),$R$5:$T$10,$R$5:$T$10)”
“=LOOKUP(RAND(),$T$5:$R$10,$T$5:$R$10)”
“=LOOKUP(RAND(),$T$5:$T$10,$R$5:$R$10)”
“=LOOKUP(RAND(),$R$5:$R$10,$T$5:$T$10)”
“=LOOKUP(RAND(),$T$5:$T$10,$R$5:$R$10)” (C)
Please simulate the demand in column E and the delivery time in column L.
Which formula belongs in cell L4 to simulate the delivery time for the first day?
“=IF(K4=0;RANDBETWEEN($T$15,$T$16),0)”
“=IF(K4=1;RANDBETWEEN($T$12,$T$13),1)”
“=IF(K4=1,RANDBETWEEN($T$15,$T$16),0)”
“=IF(K4=0;RANDBETWEEN($T$15,$T$16),1)”
“=IF(K4=1,RANDBETWEEN($T$15,$T$16),0)” (C)
You are CEO of Simkin Hardware and want to simulate demand and orders for the EF241215 drilling machine to ultimately optimize costs.
Please simulate the costs on the basis of 1000 simulation runs.
You will find the necessary information in an Excel sheet under the following link:3.4.c_Simulation_Simulation_B_Excercise.xlsx
If you let the simulation calculate several times - just press key F9 in Excel (Mac: press the keys “fn” and “next song” together): What are the mean total costs per month (approx.)?
XXX
The supplier of the drilling machine EF241215 offers to increase the order quantity to 25. What are the mean total costs per month (approx.)?
XXX
- 290
- 230
You now want to optimize the order process in order to reduce the total costs. Calculate the following three scenarios:
Scenario 1 (S1) (Base): Order_quantity = 25 and reorder_point = 8
Scenario 2 (S2): Order_quantity = 30 and reorder_point = 10
Scenario 3 (S3): Order_quantity = 20 and reorder_point = 8
You will find the necessary information in an Excel sheet under the following link:3.4.d_Simulation_Optimization_B_Excercise.xlsx
what are the total costs of S1, S2, S3
- S1: 187
- S2: 141
- S3: 202
The company Haas produces combine harvesters (Links to an external site.) and has to build a warehouse for their latest generation of vehicles. Until now, the combine harvesters are simply placed in front of the production hall after production.
Now a hall is to be built. It shouldn’t be too small (the combine harvesters shouldn’t stand outside) but also not too big (then it will be expensive).
The architect now simply wants to use the 80%-confidence interval to plan the hall.
What are the reasons why Haas uses bootstrapping? (multiple answers possible)
- Bootstrapping is suitable for the company Haas, because the procedure is generally applicable and therefore the company Haas does not have to make any assumptions about the distribution.
- Bootstrapping is suitable for the company Haas, because this method helps to understand the fluctuation of a key figure.
- Bootstrapping is suitable for the Haas company, as there are no other methods available that might be applicable to this problem.
- Bootstrapping is suitable for the Haas company, as the sample size is rather insufficient for straightforward statistical inference.
- a
- b
- d
he company Haas produces combine harvesters (Links to an external site.) and has to build a warehouse for their latest generation of vehicles. Until now, the combine harvesters are simply placed in front of the production hall after production.
Now a hall is to be built. It shouldn’t be too small (the combine harvesters shouldn’t stand outside) but also not too big (then it will be expensive).
The architect now simply wants to use the 80%-confidence interval to plan the hall. Please calculate this on the basis of past data.
You will find the necessary information in an Excel sheet under the following link:3.5.b_Bootstrap_Confidence_Intervals_B_Exercise.xlsx
f you run the Bootstrap analysis multiple times (Windows: just press F9 in Excel a few times - Mac: press “fn” and “next song” together): How high is the lower limit of the confidence interval (approx.)?
XXX
If you let the Bootstrap analysis calculate multiple times: How high is the upper limit of the confidence interval (approx.)?
XXX
Which value is of central importance for the architect?
XXX
Answer 1:
430
Answer 2:
470
Answer 3:
The upper limit of the confidence interval. It defines the maximum size of the hall to be built.
The company Haas produces tractors (Links to an external site.) and must increase productivity for their latest tractor generation in order to get the costs under control. The production is also based on, among other things, a CNC machine (Links to an external site.), which automatically produces the necessary sheets.
The manufacturer of this CNC machine now offers an update to increase the productivity of the machine considerably. This can be installed free of charge on all desired machines. However, production will be suspended for one day for the update. An update is therefore only worthwhile if it really achieves a significant improvement.
The Haas company has therefore decided to update just 10 of the machines (out of over 400 available) and to record the corresponding data: What was the daily output (produced sheets per day) of each machine before and after the update. Please check on the basis of a Bootstrap analysis using a 90%-confidence interval whether the update has a significant impact on productivity.
You will find the necessary information in an Excel sheet under the following link: 3.5.c_Bootstrap_Dependent_Sample_A_Excercise.xlsx
- If you run the Bootstrap analysis multiple times: How high is the lower limit of the confidence interval (approx.)?
XXX
- If you run the Bootstrap analysis multiple times: How high is the upper limit of the confidence interval (approx.)?
XXX
- What is your final recommendation?
XXX
Answer 1:
-3
Answer 2:
20
Answer 3:
Updates are often good, but not in this case. The lower limit of the confidence interval is less than zero. So we can’t say with the desired confidence that the update has a really positive effect.
Haas now also has to optimize the production of its forage harvester. (Links to an external site.)CNC machines are to be integrated into production for the first time. Two models are available: EF15 and OG15.10 machines of each type were tested for one day.
Please check on the basis of a Bootstrap analysis with a 95%-confidence interval if the machine EF15 is better than the machine OG15.
You will find the necessary information in an Excel sheet under the following link: 3.5.d_Bootstrap_Independent_Sample_A_Excercise.xlsx
Hint: To make sure your result is correct please perform several runs (at least four), as the higher and lower limits will then approximate the correct result.
- If you run the Bootstrap analysis multiple times: How high is the lower limit of the confidence interval?
- XXX
- f you run the Bootstrap analysis multiple times: How high is the upper limit of the confidence interval?
- XXX
- What is your final recommendation?
- XXX
Answer 1:
11
Answer 2:
51
Answer 3:
EF15 is better than OG15: the lower limit of the confidence interval is greater than zero.
The starting point of this exercise is the result of a survey on the willingness to pay for hotel rooms. The results can be found in the following Excel file: 4.2.a_Simple_Demand_Curve_A_Excercise.xlsx
Please estimate a linear demand function based on the survey results (price on the x-axis, demand on the y-axis) and enter the following values:
Slope of the demand function:
Intercept of the demand function:
Slope of the demand function:
-2.4854
Intercept of the demand function:
1426.9
Now use the Solver-function to determine the profit-maximizing price point as well as the associated demand and revenue for the hotel example from the last exercise. Use the data given in the following Excel File: 4.2.b_Optimal_Single_Price_A_Excercise.xlsx
Solver settings:
Model: GRG non-linear
Set unrestricted variables as non-negative: yes
Prices have to be integers: no
- Optimum price point:
- Demand at the optimal price point:
- Revenue at the optimal price point:
Answer 1:
307
Answer 2:
715
Answer 3:
219’464
Please add a second segment to the hotel example from “Price Optimization - One Segment” and calculate the optimal prices for the high-price and a low-price segment. Please use the data given in the following Excel file: 4.3.c_Two_Price_Optimization_A_Excercise.xlsx
Solver settings:
Model: GRG non-linear
Set unrestricted variables as non-negative: yes
Prices have to be integers: no
Optimum price for the high-price segment:
Optimum price for the low-price segment:
If the optimum revenue without segmentation equals 100%, how much is the optimum revenue with two segments?
Optimum revenue with price discrimination in % of the revenue without price discrimination:
Answer 1:
409
Answer 2:
205
Answer 3:
133%
he hotel in the city center of Munich from the previous exercises manages 300 beds. What are the optimal prices for 2 segments considering the capacity constraint? Please use the data given in the following Excel file: 4.3.d_Capacity_Restricitions_A_Excercise.xlsx
Solver settings:
Model: GRG non-linear
Set unrestricted variables as non-negative: yes
Prices have to be integers: no
If you have problems with the Excel Solver (a demand value smaller or equal to zero) please talk to us in the coaching sessions.
Optimal price for the high-price segment:
Optimal price for the low-price segment:
Answer 1:
550
Answer 2:
485
The following task was not directly discussed in the videos. However, you should be able to deduce the right solutions with your current knowledge.
In order to optimise revenues further, the owner of the hotel in Munich from the previous exercises would like to apply an even finer differentiation of prices. Give the owner recommendations on the optimal price points for a high, medium and low-price segment. By how much can the revenue compared to 2 price segments be increased? The hotel’s capacity limit is still 300 beds.
Use the data given in the following Excel sheet: 4.3.e_Three_Segments_A_Excercise.xlsx
Solver settings:
Model: GRG non-linear
Set unrestricted variables as non-negative: yes
Prices have to be integers: no
Optimal price for the high-price segment:
Optimal price for the medium-price segment:
Optimal price for the low-price segment:
Revenue increase compared to 2 price segments:
Answer 1:
571
Answer 2:
528
Answer 3:
485
Answer 4:
3220
You are working for a local IT service provider that sells the software “Word” and “Powerpoint”.
Determine the optimal separate pricing strategy for the following example: 4.4.b_Separate_Pricing_A_Excercise.xlsx
What’s the total profit that you can earn?
190
You are working for a local IT service provider that sells the software “Word” and “Powerpoint”.
Determine the optimal pure bundling pricing strategy for the following example: 4.4.c_Pure_Bundling_A_Exercise.xlsx
What’s the total profit that you can earn?
150
You just conducted a market survey in the airline industry and you obtained sample demand data for a flight from Zurich to Vienna. You can find the sample demand data in the following Excel: 4.5.c _Non_Linear_Demand_Curve_Optimization_A_Exercise.xlsx
Calculate the optimal price point assuming a linear demand distribution
Calculate the optimal price point assuming a power demand distribution
Solver settings:
Model: GRG non-linerar
Set unrestricted variables as non-negative: yes
Prices have to be integers: no
What’s the difference between the two prices?
Your company wants to introduce an electro scooter sharing service in St. Gallen. You investigated the willingness to pay for 6 potential customers. You can find the results in the following excel: 4.5.e_Two_Part_Tariff_Optimization_A_Exercise.xlsx
To maximize profit, you are applying a two part-tariff. How high is the profit that you can earn with the optimal pricing?
Hint:
if a consumer has several consumer surpluses maxima, we always use the option with less consumption
Solver settings:
Model: evolutionary algorithm
Set unrestricted variables as non-negative: yes
Prices have to be integers: yes
12
