Psm 508 Supply Chain Management Question Paper
Psm 508 Supply Chain Management
Course:Masters Of Business Administration Procurement And Supply Management
Institution: Kca University question papers
Exam Year:2014
UNIVERSITY EXAMINATIONS: 2013/2014
EXAMINATION FOR THE MASTERS OF BUSINESS ADMINISTRATION
(MBA) PROCUREMENT AND SUPPLY MANAGEMENT
PSM 508 SUPPLY CHAIN MANAGEMENT
KITENGELA CAMPUS
DATE: AUGUST, 2014
TIME: 3 HOURS
INSTRUCTIONS: Answer Question One and Any Other Three Questions
QUESTION ONE (31 MARKS)
STOCK CONTROL MANAGEMENT MODELS.
Economic order quantity is the order quantity that minimizes total inventory holding costs and ordering
costs. It is one of the oldest classical production scheduling models. The framework used to determine
this order quantity is also known as Wilson EOQ Model or Wilson Formula. The model was developed
by Ford W. Harris in 1913, but R. H. Wilson, a consultant who applied it extensively, is given credit
for his in-depth analysis
EOQ applies only when demand for a product is constant over the year and each new order is
delivered in full when inventory reaches zero. There is a fixed cost for each order placed, regardless of
the number of units ordered. There is also a cost for each unit held in storage, commonly known as
holding cost, sometimes expressed as a percentage of the purchase cost of the item.
We want to determine the optimal number of units to order so that we minimize the total cost
associated with the purchase, delivery and storage of the product.
The required parameters to the solution are the total demand for the year, the purchase cost for each
item, the fixed cost to place the order and the storage cost for each item per year. Note that the number
of times an order is placed will also affect the total cost, though this number can be determined from
the other parameters.
1
Given the information bellow, calculate the following.
Suppose annual requirement quantity (D)= 10000 units
Cost per order (K)= 2/=
Cost per unit (C) = 8/=
Carrying cost percentage (h/c) (Percentage of C)= 0.02
Annual carrying cost per unit (h)= 0.16
a)
Given the following information, calculate the following.
(i) Calculate economic order quantity ii). Number of orders per year based on EOQ (4 Marks)
iii). Total cost (4 Marks)
iv). What will be the total cost if the EOQ changes to 600 units (4 Marks)
v). What if the EOQ is based on 300 units (4 Marks)
vi). Make the comment based on the three levels of the EOQ
b)
(4 Marks)
(3 Marks)
Explain the main assumptions of EOQ model (8 Marks)
QUESTION TWO (23 MARKS)
Discuss the importance of relevant information on the following factors as may be used in the supply
chain decision modeling
i) Manufacturing Process and time information (5 Marks)
ii) Inventory control policies information (5 Marks)
iii) Procurement and logistics information (5 Marks)
iv) Demand information (5 Marks)
v) Policies/Strategies information (3 Marks)
QUESTION THREE (23 MARKS)
Discuss the expected benefits of supply chain models in an organization based on the following factors
(i) Throughput improvements (4 Marks)
(ii) Cycle time reduction (4 Marks)
(iii) Inventory cost reductions (3 Marks)
(iv) Optimized transportation (4 Marks)
(v) Increased order fill rate (4 Marks)
(vi) Increased customer responsiveness (4 Marks)
2
QUESTION FOUR (23 MARKS)
a)
In a supplier engagement model, there are joint activities between the suppliers and the buyers.
Explain the joint activities between the buyers and suppliers.
b)
(18 Marks)
Discuss the challenges that may limit the use of supply chain models in collaborating firms
(5 Marks)
QUESTION FIVE (23 MARKS)
a)
Most supply chain managers, believe that deriving of supply chain models solve every bit of
their problems. This is not the case. Explain the main limitations of supply chain models
(10 Marks)
b)
Having been appointed as the Supply Chain manager in the newly established organization,
you are required to explain to your MD how you would introduce a new product in the market.
Explain some of the most crucial activities involved in the New product introduction process
(13 Marks)
QUESTION SIX (23 MARKS)
Supply Chain model is a subject that cannot be shelved out in the attainment of the real time customer
service. Explain how the supply chain models would create value in the following activities
(i) Demand planning (5 Marks)
(ii) Master planning (5 Marks)
(iii) Procurement (5 Marks)
(iv) Transportation (3 Marks)
(v) Manufacturing (5 Marks)
3
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