AIMA Assignments: contact us for answers at assignmentssolution@gmail.com

OM05

Supply Chain Management

(For CNM Cases)

Assignment - II

  Assignment Code: 2016OM05A2                                        Last Date of Submission: 30^th April 2016

                                                                                          Maximum Marks: 100

Attempt all the questions. All the questions are compulsory and carry equal marks.

                                                                         Section-A

1.         a.         Discuss the expected costs of Stockouts.

            b.         Discuss what is meant by the term Uncertainty and Implied Uncertainty in                                    demand.

2.         A key part of the procurement process is the selection of vendors. What criteria are        commonly used in this selection process? Which criteria should be given highest         priority?  Why?

3.         Movement and storage are two basic functions of warehousing. Discuss the emphasis     placed on these two basic functions in cross-docking, distribution, and basic raw     material warehouses. What is the rationale for the similar or different emphasis?

4.         One objective of material handling is to increase effective capacity that is to improve     space utilization. How does material handling help to achieve this objective?

SECTION-B

Case Study

A firm was purchasing a number of different materials for the processing of their product. On making a preliminary ABC analysis, they shortlisted three items which belonged to the A category. Out of these one of the items was analysed in great detail and following was the information they obtained. The average demand for the product was 18000 pieces per month with a standard deviation of 2800 per month. The cost for ordering which was mainly by way of transportation cost was Rs. 5000 per order. The price of the product varied with the vendor with whom they would contract. Vendor A quoted Rs. 50 per unit and he promised to deliver the same within 3 weeks. The second vendor quoted Rs. 55 per unit and he promised to deliver the same in 2 weeks time. Both the vendors insisted on immediate payment as credit was difficult to come by. The company would pay for the same from their working capital but would incur 12% interest for the same. The firm was interested in understanding the following:

5.         Case Questions:

a)         What will be the economic order quantity for the two vendors?

b)         If the firm maintained Continuous review policy, what would be the safety stock for         each of the vendors if 95% customer service level was desired to be maintained?

c)         Which vendor should the company prefer in order to procure the items? Assume             quality standards etc. are same with both the vendors.