Risk and Quality Management for Supply Chain
2122_SC_5_3_012_E
Case study 2
Hamed Jalali
February 2022
1
Introduction
This case study concerns risk management for suppliers of a wireless internet service provider,
and it was written by Prof. Guillaume Roles (INSEAD), Prof. David Simchi-Levi (MIT), and
Anne-Marie Carrick (INSEAD). The goal of this case study is to teach you the consequencedriven approach to risk management proposed by Simchi-Levi et al. (2014)1 which they applied
to analyze Ford’s exposure to supply chain disruption. The challenge of this case study is to
make sense of all the information available. This is often the case in practice.
Your tasks
Go to https://hbsp.harvard.edu/import/902322 and click on “supply chain Resilience in the
Telecom industry case study” and download the Excel file and the case description. Read the
case description carefully. After reading it, please answer the following questions in your
report:
•
Questions 1 – 4 at the end of the case description under assignment.
‼ In Question 4, demand rate must be calculated per week. Assume there are 4
weeks per month.
‼ Ignore Question 5, instead answer the following questions
•
Pick the component that in your opinion is the single most critical. Assume the supply
chain of this component is as depicted in Exhibit 3 (last page of the case description),
where TTR stands for time to recover. What is the exposure time in weeks when supplier
1A is unavailable due to a disruption? Calculate the same when supplier 1B is
unavailable.
𝐸𝑥𝑝𝑜𝑠𝑢𝑟𝑒 𝑡𝑖𝑚𝑒 = max{0, 𝑇𝑇𝑅 − 𝑇𝑇𝑆}
•
Consider a 20% holding carrying rate (per-unit holding cost = 0.2 × unit cost) for the
critical component. How much inventory cost the firm must pay to cover the exposure
time?
1
: Simchi-Levi, D., Schmidt, W., & Wei, Y. (2014). From superstorms to factory fires: Managing unpredictable
supply chain disruptions. Harvard Business Review, 92(1-2), 96-101.
2