Question 1

Why should an organization invest in supplier development program? What are the challenges of supplier development activities? (about 1.5 pages)

Question 2

What are "market mediation costs"? Explain these costs in some detail. Give one example of a product which has high market mediation costs, and also yet another example of a product which has low market mediation costs. Which type of supply chain is most suited for products with low market mediation costs? Explain (about 2 pages)

Question 3

The weekly requirement of a part is 580 units. The order cost is $95 per order. The holding cost is $5 per unit per year, and the part cost is $950 per unit. The firm operates fifty-two weeks per year.

1. Calculate the following - Economic order quantity, annual holding cost, annual order cost and the annual inventory holding cost.

2. Suppose the firm is currently ordering once every four weeks (i.e., orders what is needed to meet the demand over next four weeks at a time). How much can the company save per year

Question 4

ABC Company buys widgets from XYZ Company. ABC places orders using economic order quantity formula. ABC Company recently retained a consultant to improve its operations, and this has resulted in an increase in the order lead time, but it has reduced the variation in the lead time in getting the widgets from XYZ. The consultant was also able to reduce the cost of placing the orders. Answer the following (along with a brief explanation of a line or two for each)-

1. What is the effect on order size?

2. What is the effect on safety stock?

3. What is the effect on annual costs (consisting of annual order costs, annual inventory holding costs and annual purchase costs)?

Question 5

Read the case described on the next page. Suppose you are hired as a summer intern by Alicia Wong to write a report on the issue.

1. What are the advantages and disadvantages of manufacturing mustard (exclude cost issues from consideration. (about one and a half page)

2. Make a cost analysis of i) outsourcing mustard, and also ii) manufacture of mustard in-house. Which is cheaper?

Attachment:- Alicia-Wong.pdf