BA0260 SINGAPOREPOLYTECHNIC 2008/2009 SEMESTER TWO EXAMINATION Diplomain Business Administration 2 Stage Full Time PRINCIPLESOF SUPPLYCHAIN MANAGEMENT

Time Allowed: 2 hours

Instructionsto Candidates: 1. The examination rules set out on the last page of the answer booklet are to be complied with. of This paper consists FIVE ($ questions:

2.

Marks
Question1 Question2 Question3 Question 4 Question5 Total 3. 4. 5. Answer ALL questions. All answersare to be written in the answer booklet provided. Questions may be answered in any order but your answers must show the question number clearly. ALWAYS start a new question on a fresh page. elaboratedin all Use Sub-headings to highlight all reasonsor considerations your answers. I (6) pages(inclusive of cover page). This examination paper consistsof SIX 22 20 19 24 15 100

6.

7.

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BA0260 ANSWER ALL QUESTIONS. has 3 main The 1. Comfu Pte Ltd sells bedroomaccessories. comp*y ",rrr"ritly sold.ComS is dueto performa yearlyweighted-criteria suppliers the products for These the informationavailable: are evaluation its suppliers. on SupplierI (Ouality: 95)
SalesOrder

1 2
J

5
Supplier 2 (Oualitv: 75) SalesOrder I

On-Time?fYes or No) Yes Yes Yes Yes Yes

Other comments

Damaged

2
a J

On-Time? (Yes or No) Yes No

Other comments Incomplete documentation Shortofl box

4 5
Supplier 3 (Oualitv: 88)

Yes Yes
No

Order Sales
I

On-Time?(Yesor No)
No

Other comments Traffic Jam

2
J

4 5

Yes Yes Yes

Yes

Reliability (0.6) andQuality (0.4).Reliability is Comff uses2 criteriaon its suppliers: and PerfectOrder Fulfilment scores of its measured the Delivery Performance by equally. with eachweighted suppliers, Comfuhasthe following classification'
Score Range Lessthan 70 More than 70 but less than equal to 80 More than 80 but lessthan equal to 90 More than 90 but lessthan equalto 100 Classification Unacceptable Conditional Acceptable

Preferred

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8A0260
a) Calculatethe Delivery Performance for all the suppliers. (6 Marks)

b) Calculatethe Perfect Order Fulfilment for all the suppliers.

(6 Marks) c) With the information obtained from Qla and Qlb, draw up a weighted-criteria evaluation table for each supplier to determine the classification of each supplier. (6 Marks) d) State and describe the sourcing strategy that you would recommend to Comfl' after conducting the weighted-criteria evaluation in Qlc above. Identify ONE specific action that Comff should take basedon the recommendedstrategy. (4 Marks) Total: 22 Marks

2. Count & Count (C&C) Pte Ltd sells calculators and faces an ar;ual demand of 10,000units in 2007. The following information is obtained from their records:

Item
Gross Inventory Value Selline Price

Details

s$24.000
S$3O/each

HoldineCost
Cost of GoodsSold Number of orders made in2007

$0.50/unit/year
l5%oof Total Revenue

:;'

while C & C takes take 30 daysto pay for their purchases customers On average, 45 daysto pay their suppliers. Assumptions: 365daysayear,52weeksayearandTdaysa week to LeadTimefrom Supplier Count& CountPteLtd:0 days
a) If Count & Count Pte Ltd uses the Economic Lot Size Model as its inventory policy, calculateits: management
I

i)

Economic Order Quantity (EOQ), and

(2 Marks) (2 Marks)

ii) Ordering Cost for 2007.

b) Under the Economic Lot Size Model, there are a few assumptionsthat must be made. Other than keeping lead time constant or zero, briefly describe any FOUR other assumptionsfor this model to work. (2 Marks)

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BA0260
c) The owner of Count & Count Pte Ltd, Mr. Koh, recently read an article and found out that keeping inventory is actually a cost to the company. He therefore approached you, the Purchasing Manager, to understand the need for inventories. Provide Mr. Koh the FOUR reasons why the company needs to keep inventories. (4 Marks) d) Mr Koh also understandsthat there are other inventory management policies other than the Economic Lot Size Model. State TWO other inventory managementpolicies that the company can consider. Explain eachbriefly. (4 Marks) e) Mr Koh is also interested to know how well the company has managed its assets, especially the number of days Count & Count takes to sell off its inventory after buying them from the supplier. Calculate Count & Count Pte Ltd's Cash-to-Cash Cycle Time. (4 Marks) , Evaluate Count & Count Pte Ltd's performance in terms of its Cash-to-Cash Cycle Time. (2 Marks) Total: 20 Marks

3. NOKIA is a leading brand in mobile phones industry. Refer to the following extract from www.nokia.com.sg on NOKIA's warranty programme and answer the questionsthat follow. "Wamanty Period The warranty period starts at the time of Product's original purchase by theJirst end-user. The Product may consist of several dffirent parts and dffirent parts may be coveredby a dffirent wananty period (hereinafter "Wananty Period"). How to get warranty service ,

If you wish to make a claim under the Limited Warranty, you may call the Nokia call center (where this is available and please note national rates apply to calls) and/or where necessary,return your Product or the affectedpart (if it is not the entire Product) to a Nokia care center or Nokiq designated service location. Information about Nokia care centers, Nokia designated service locations and Nokia call centers can befound at local Nokia web pages where available. You must return your Product or the affectedpart (if it is not the entire Product) to a Nokia care center or Nokia designated service location before the expiry of the Warranty Period.

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BA0260
a) One of the examplesunder Service Parts Logistics (SPL) is supporting warranty

prograrnmes,like the one provided by NOKIA. List any TWO other examples ofSPL. (l Mark) b) Discussthe THREE considerationsthat may have prompted NOKIA to provide warranty programme for their products. (6 Marks) c) Would you recommend NOKIA to engagea 3'd Party Logistics Provider (3PL) to manage its warranty programme? Support your answer with any TWO reasons. (4 Marks) d) To support such a warranty programme, NOKIA needsto ensurethat it has an effective and efficient transportation system. Discuss any FOUR ways to managetransportation system. (8 Marks) Total: 19 Marks

4. Your brother works in a manufacturing plant in which production takes place every day. Lately, he notices that stock is accumulating. However, he also heard from the salesstaff that salesis declining. He has heard you mentioned before that one of the challenges in Supply Chain Management (SCM) is the "Bullwhip Effect". a) Define Supply Chain Management(SCM) and its goal to an organisation. (2 Marks) b) Provide any FOUR reasonsfor the growing importanceof SCM.

(8 marks) ul c) Explain "Bullwhip Effect" in the light of what is happening yorr brother's plant. (2 marks)
of d) Explain the FIVE possible causes Bullwhip Effect. (10 marks) e) You mentioned to your brother that the manufacturing plant is one of the key Supply Chain entities. List any other FOUR key Supply Chain entities. (2 marks) Total: 24 Marks

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BA0260 5. You are working for a Small Medium Enterprise (SME) during your vacation and are involved in a meeting between the Sales and the Distribution departments. Your immediate superior has arrangedthis meeting as he is tasked to convince the 2 departmentsthat they are actually jointly responsible to ensure the business is run smoothly and how different distribution strategies has an impact on a company's profitability. a) Your role in the meeting is to share with the 2 departmentsthe THIRTEEN steps in the Sales and Distribution Process.Draw the process flow and explain each step in detail. (11 Marks) b) The Sales Manager is a Singapore Polytechnic graduate but did not have the 'Principles of Supply Chain Management' module like you chance to take the do. However, he read that there are various distribution strategies.First, we have the 2 fundamental distribution strategies,namely: direct shipment strategy and use of intermediate inventory storage points strategy. Under the intermediate inventory storage points strategy, we have the traditional warehousing strategy and cross-docking strategy. Enhance the Sales Manager's knowledge by describing the FOUR functions of the Traditional Warehousing Strategy. (4 Marks) Total: 15 Marks

-End of Paper-

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