USN:
PES INSTITUTE OF TECHNOLOGY – BANGALORE SOUTH CAMPUS
Hosur Road (1Km before Electronic City), Bangalore -560100
INTERNAL TEST # 1
Supply Chain Management :12 MBA 41
Course: MBA Semester IV
Faculty: Mrs. K.Suma Rao
Date: 10/02/2014
Note:
Time Allowed: 90 Minutes
Max. Marks: 50 (Fifty Marks)
Time:8.30 AM – 10 AM
Answer all the Questions.
1 (a) What is a supply chain and what is its goal?
(b) Identify the key supply chain decision phases and explain the significance of each of them with an
example.
(c) Discuss the cycle and the pull/push views of a supply chain with appropriate examples.
2 (a) What is Supplier scoring and assessment?
(b) Discuss the various supply chain design options.
(c) Discuss the advantages and disadvantages of any two transportation modes. When would you
utilize them and for what advantage?
3 Case Study - (Compulsory)
(3 marks)
(7 marks)
(10 marks)
(3 marks)
(7 marks)
(10 marks)
(10 marks)
Seven-Eleven Japan Co.
Established in 1973, Seven-Eleven Japan set up its first store in Koto-Ku, Tokyo in 1974.The
company realized phenomenal growth between the years 1985 and 2003.During this time the
number of stores increased from 2,299 to 10,303; annual sales increased from 386 billion to 2,343
billion yen and net income increased from 9 billion to 91.5 billion yen. Return on Equity was at 14%
during 2000 to 2004.The company was the largest retailer in terms of turnover and number of
stores. Customer visits totaled 3.6 billion in 2004 with about 30 visits to every person in Japan.
The company worked on an elaborate franchise network and performed a key role in the daily
operations of this network. The network included both company owned and third party owned
franchises. To ensure efficiency the company based its fundamental expansion policy on a market
dominance strategy. Entry into any new market was built around a cluster of 50 to 60 stores
supported by a distribution center. Each cluster gave the company a high –density market presence
and allowed it to operate an efficient distribution system.
a.
List some of the advantages of this market dominance strategy from a supply chain perspective.
(05 marks)
b.
What in your opinion would be the responsibilities of a franchise owner being a member of the (05 marks)
supply chain.
Answer Key: Test I:
Supply Chain Management: Test 1 Answer Key
1 (a) A supply chain consists of various parties involved directly or indirectly to fulfill a
customer’s request. It includes the transporters, warehouses, retailers and the customers.
Within the organization a supply chain includes functions which are carried out for receiving
and filling a customer request.
The goal of the supply chain is to maximize the value generated. Value is what the final
product is worth to the customer and the cost the supply chain incurs which also refers to the
supply chain profitability or surplus.
(b) The supply chain decision phases refer to the supply chain design, planning and
operations. They fall into three categories or phases depending on the frequency and the time
frame.
1. The supply chain strategy or design decides on how to structure the supply chain over next
several years. It refers to the chain configuration, resources allocation and what processes
each stage will perform. Design decisions are made for the long term and are difficult to alter
2. The supply chain planning considers a time frame of a quarter to one year. Given the
supply chain configuration at the strategic phase, the planning must be done within this
constraint. The goal of planning is to maximize the supply chain surplus over the year.
Companies try to exploit the flexibility built in the design phase to optimize performance.
3. The supply chain operations have a time frame of a week or a day. During this phase
companies make decisions regarding individual customer orders.
Examples
1(c) The cycle view refers to customer order cycle, replenishment cycle, manufacturing cycle
and procurement cycle each at the interface of two successive stages in the supply chain. The
pull push view looks at processes with respect to planning related areas and demand fulfilling
areas. Need to explain these concepts.
2.(a) . Suppliers should be compared based on their impact on supply chain surplus and total
cost.Many sourcing decisions are based on lowest price charged by supplier.Many other
supplier characteristics like lead time, reliability, quality and design capability also affect the
total cost of doing business with a supplier.A good supplier scoring and assessment process
should identify and tract performance along all dimensions that affect the total cost of using a
supplier
b.Supply Chain design options refer to the following:
(i) Manufacturer storage with direct shipping.
(ii) Manufacturer storage with direct shipping and in-transit merge.
(iii) Distributor storage with package carrier delivery.
(iv) Distributor storage with last mile delivery.
(v) Manufacturer /distributor storage with customer pick up.
(vi) Retail storage with customer pickup.
Each to be explained with examples.
c.The various transportation modes include
(i) Air,
(ii) Package carriers
(iii) Truck
(iv) Rail
(v) Water
(viPipeline
(vii) Intermodal.
Any two to be discussed
3. Case analysis as per the facts of the case.