JAIPURIA INSTITUTE OF MANAGEMENT, LUCKNOW
PGDM/FS/RM
4th Trimester (Batch 2019-21)
END TERM EXAMINATIONS
Course Name Supply Chain Management Course Code OM401
Max. Time 120 Min Max. Marks 40
Instructions: ………………………………………………………………...…………………………
1. Write in precise and clearly according to the mark’s distribution.
2. Whenever an assumption is required, you may mention the assumption.
3. In question no 1 and 5, you can draw diagram in PowerPoint or using pen & paper and paste
the image into word file.
Question 1: Construct the framework of major drivers of supply chain, and justify how these
drivers are helpful for increasing strategic fit spectrum? Draw the relationship between competitive
strategy and supply chain strategy. 5 Marks
Question 2: Discuss the importance of different supply chain distribution network design (only list
them)? Also, compare the different supply chain distribution network based on cost and service
factors. (you can use suitable comparative scale, but need to define before use). 4 Marks
Question3 (a). Investigate the relationship of VMI and CPFR for reducing Bull-whip effect in
supply chain. 3 Marks
Question 3 (b). Explain how to manage supply chain cycle inventory. 2 Marks
Question 3 (c). Explain the impact of supply and demand uncertainty on safety inventory and
inventory cycle. 2 Marks
Question 4 (a). Discuss the factors influencing the network design (only list out the factors). 2
Marks
Question 4 (b). An Indian Cloth manufacturer plans to open manufacturing plant at Kanpur, Hosur,
Nagpur, Surat, and Kolkata. The production manager of the company decided that to open plant
with two variants such as high or low capacity. The high capacity produces annually 20 million
units and low capacity plant produce 10 million unit. The fixed and variable cost in multiplication
of 10,000 INR (transportation, ordering, and production) is given as in the Table below. The annual
demand for each of the location are 12, 8, 14, 9, and 6 million units respectively.
Page 1 of 2
Production, Transportation, and Ordering Low Capacity High Capacity
cost in multiplication of 10000 INR fixed cost fixed cost
Supply Kanpu Hosur Nagpur Sura Kolkata 6000 9000
point r t
Kanpur 80 92 110 102 115 6000 9000
Hosur 117 75 104 106 105 4500 6750
Nagpur 100 80 87 116 125 6500 9750
Surat 113 89 102 98 119 4100 6150
Kolkata 134 103 114 112 100 4000 6000
Formulate the total cost optimization model for cloth manufacturing company. Also, solve the
optimization model using Excel Solver and attach the formulated model and computation window
output. - 8 Marks
Question 5: A toy manufacturer want to take decision on warehousing of its produced items with
spot market or leased warehouse. The long-term outsourcing is currently cheaper than inhouse
production. The plant manager anticipates uncertainty in demand and cost of the inhouse or
outsourcing price over the next three years. The outsourcing is cheaper but could go unused if
demand is lower than anticipated. The outsourcing may also end up being more expensive if future
outsourcing price come down. In contrast, spot market cost is high from outsourcing if future
demand is high. The managers have to analyses two options; such as
1. To get all warehouse space from spot market based on requirement.
2. Sign an outsourcing contract for a three year and procure spot market space when demand is
increases.
The annual demand is 100,000 units and each unit require 1 square feet warehouse space. The
manager forecasts that from current year to next year, the spot warehouse price may increase by
15% with a probability of 0.6 or go down by 15% with a probability of 0.4. The probability of these
two outcomes are independent and unchanged from one year to next year.
The Manager can sign a three-year lease at a cost of $ 1/square feet/year. Warehouse space
availability on the spot market is $ 1.2/square feet/ year. From current year to next year the price of
the spot market warehouse may go up by 10 % with probability of 0.4 or go down by 10% with
probability of 0.6.
The revenue of each unit is $ 1.25, and company should meet the all the demand. The manager uses
a discount rate of 0.12 for each of the three years.
Draw the decision tree for both the options and provide your managerial insights based on the
decision tree analysis. – 8 Marks
Question 6 (a): How EOQ and EPQ are related and also highlight the mathematical relationship
among them? - 2 marks
Question 6 (b): Define the following
Single period inventory model
Relationship between reorder point and safety stock (for probabilistic demand scenario)- 2
marks each
Page 2 of 2
