Supplement 11 Supply Chain Management Analytics

According to the techniques for evaluating supply chains, what is the primary purpose of using a decision tree when managing disaster risk?

A company is analyzing its supply chain risk. The probability of a 'super-event' that would disrupt all suppliers is 0.5 percent (0.005). The 'unique-event' risk for any single supplier is 4 percent (0.04). If the company uses three suppliers, what is the total probability of all three suppliers being disrupted simultaneously?

What is the definition of the bullwhip effect in a supply chain?

A manufacturer in a supply chain has a weekly variance of demand from its customer (a distributor) of 180. The manufacturer places orders with its supplier that have a weekly variance of 300. What is the bullwhip measure for this manufacturer?

According to Table S11.1, what is the recommended remedy for order batching, which is a cause of the bullwhip effect?

In the factor-weighting approach to supplier evaluation, what is the primary purpose of assigning a weight to each criterion?

A company is using the factor-weighting approach to evaluate two suppliers. The weight for 'Quality performance' is 0.10 and for 'Integrity' is 0.20. Supplier A has a score of 2 for Quality and 5 for Integrity. What is the combined weighted score for Supplier A on these two factors?

What is the primary trade-off that operations managers evaluate when analyzing transportation modes?

A shipment of components is valued at 1,750 dollars. The annual holding cost is 40 percent of the product's value. What is the daily cost of holding this product?

What is the primary objective of the method used to determine storage locations in a warehouse, as described in the supplement?

A warehouse manager needs to assign storage locations for two items. Item A requires 5 blocks of storage and has 600 monthly trips. Item B requires 2 blocks of storage and has 260 monthly trips. Based on the ratio of trips to blocks, which item should be placed closer to the dock?

What does variance amplification in the bullwhip effect measure indicate?

In the context of evaluating disaster risk, what does the term 'super-event' refer to?

What is an interesting implication of Equation (S11-1) regarding the probability of a super-event (S)?

Chieh Lee Metals, Inc., a firm in a supply chain for tables, has a variance of demand of 300 and a variance of orders of 750. What is its bullwhip measure?

What is a potential pitfall or limitation of relying solely on the factor-weighting approach for supplier selection?

In a factor-weighting analysis, a supplier receives a score of 3 (out of 5) on a criterion that has a weight of 0.15. What is the weighted score for this specific criterion?

A shipment of goods is valued at 2,000 dollars, and the annual holding cost is 30 percent. A faster shipping option costs 25 dollars more but saves two days of transit time. Is the faster shipping option economically justified based on holding cost savings?

In the warehouse storage allocation method, what does the 'bang-for-the-buck' trade-off represent?

An item in a warehouse, 'Small Hardware', requires 2 storage blocks and has 400 monthly trips. Another item, 'Lightbulbs', requires 1 storage block and has 220 monthly trips. Which item is ranked higher and should be placed closer to the dock?

Which of the following is NOT listed in Table S11.1 as a cause of the bullwhip effect?

A retailer has a weekly demand variance of 200 units. The variance of the orders the retailer places to its wholesaler is 500 units. What is the bullwhip measure for this retailer?

What is the primary human tendency that often exacerbates the bullwhip effect phenomenon?

A firm wants to choose between two sourcing options. The 'San Francisco option' has purchasing costs of 500,000 dollars and an expected annualized disruption loss of 16,020 dollars. The 'North American option' has purchasing costs of 510,000 dollars and an expected annualized disruption loss of 8,792 dollars. Which option is cheaper and by how much?

When using the factor-weighting approach, how are the final scores of competing suppliers used?

In the decision tree analysis for managing risk, what does EMV stand for?

What is the overarching solution to the bullwhip effect?

A manager wants to evaluate a fast but expensive shipping option against a slow but cheap one. Beyond the direct shipping and holding costs, what is an important qualitative factor mentioned in the text that could make the expensive option better?

In warehouse storage, what happens to an item like 'Lumber' which has the highest number of trips but also requires a very large amount of storage space?

A manager is calculating the bullwhip measure for their firm. The variance of incoming demand is 961. The firm has successfully reduced its bullwhip measure to 1.20. What is the new variance of the orders the firm places?

In a decision tree for managing supplier risk, what does the financial loss (L) represent?

What is the recommended remedy for 'Shortage gaming' as a cause of the bullwhip effect, according to Table S11.1?

A factor-weighting analysis is being conducted. Integrity is given a weight of 0.20, and Production process capability is given a weight of 0.15. If a manager believes integrity should be twice as important, what would its new weight be, assuming the sum of all weights must be 1.0?

In a single-aisle rectangular warehouse, there are storage blocks numbered 1 through 15 on one side and 2 through 16 on the other, with the dock at the beginning. An item is assigned to block 1. What can be inferred about this item?

What is the bullwhip measure if the variance of orders is 2,859 and the variance of demand is 1,804?

If a company uses a single supplier, what is the probability of a total disruption according to Equation (S11-1)?

A French car company is considering shipping cars through the Chunnel instead of by ferry. The Chunnel option costs 80 dollars more per car. The total holding cost savings by using the faster Chunnel option is 110 dollars per car. Which option is better and what is the net savings per car?

The INSIGHT for Example S5, regarding warehouse storage, suggests that if you have a choice between two equidistant blocks for an item, you should place it...

If a firm's bullwhip measure is 0.8, what does this indicate?

According to Solved Problem S11.3, if paper quality is considered twice as important as delivery reliability, customer service, and financial condition, what weight should be assigned to paper quality?

What is the key characteristic of disasters like the 2011 Tohoku earthquake and tsunami that makes supply chain management so challenging?

In Example S1, a company is evaluating suppliers for motors. The marginal cost of managing an additional supplier is 10,000 dollars, and the financial loss from a total disruption is 10,000,000 dollars. If the company uses two suppliers, what is the payoff (total cost) if a total disruption occurs?

A key learning from the 'Cash for Clunkers' program was that fearing a shortage and assuming they would not receive 100 percent of their orders led some dealers to do what?

What is the primary reason for calculating the ratio of (trips/blocks of storage) when allocating items in a warehouse?

Which of the five techniques introduced in the supplement is used to help managers decide whether to purchase collision insurance for a car?

A wholesaler has a weekly variance of orders from its retail customer of 500. The wholesaler places orders with its distributor that have a weekly variance of 600. What is the bullwhip measure for this wholesaler?

In factor-weighting analysis, Papel Grande has a total weighted score of 84, while Monterrey Paper has a score of 77. Which supplier should be chosen?

What does a bullwhip measure of 2.67 for Metal Suppliers Ltd. signify?

A company is deciding between two suppliers for a component. Which technique is most appropriate for making this decision based on multiple criteria like quality, cost, and innovation?

A manager is assigning items to a warehouse. An item has 90 monthly trips and requires 3 storage blocks. What is its trips-per-block ratio?