Exam Supply Chain Network Design (EBM040A05)

November 4, 2015

Coordinator: Prof. dr. I.F.A. Vis Date: November 4, 2015 Time: 6.30pm Duration: 3 hours Number of questions: 6 Type of questions: open Answer in: English Credit score: 100 credits counts for a 10 Number of pieces: 3 (see box)

           

 

 

Good luck! 

This exam is divided into three separate pieces.

1. This front page, plus sheet with formulas, plus scrap paper; no questions 2. Question 1,2,3,4,5 (Vis; 11 pages) 3. Questions 6,7 (Van Leeuwen; 7 pages)

The pieces will be corrected separately, so do not write answers of one piece on the other piece!

Do not forget to add your name and student number on top of the front page of each piece.

Please write the answers in the boxes provided. If insufficient space is provided and/or you made an error, please use the back side of the sheet containing that question.

It is not allowed to use a dictionary, your book or other materials.

A FEW FORMULAS

Forecasting formulas

Naive: Ft = At – 1

Moving Average: nAFt

ntiit /

1

With weights:

11

/t

ntii

t

ntiiit wAwF

Exponential smoothing:

Ft = Ft – 1 + α(At – 1 - Ft – 1)

n

AFAMAPE

nFAMSE

nFAMAD

ii

n

ii

i

n

ii

i

n

ii

/||100

/)(

/||

1

2

1

1

Tracking signal =

)/(

)(

nFA

FA

ii

ii

SCRAP PAPER

SCRAP PAPER

SCRAP PAPER

 

1  

Exam Supply Chain Network Design (EBM040A05) November 4 , 2015

Questions 1,2,3,4,5: 75 credits

Your name and student number:

Exercise 1 Cash Supply Chain Network Design (25 credits) Customers withdraw and deposit money at banks. To fulfill the demand of customers sufficient money should be available at the safes of the banks. On the other hand, too much money in inventory is not allowed due to safety reasons. The logistics managers of the banks, therefore, make on a daily basis forecasts on the amount of money to be ordered from the National Bank and the amount of money to be send back to the National Bank. This forecast is translated into a standard e-mail, which is transmitted to the National Bank. The National Bank sends a confirmation message with an indication of the data and time of delivery. An external transportation company is hired to transport the money. Each day this company and the National Bank communicate on the number of trucks required and the location of the banks. All trucks of this company are parked at the parking area of the National Bank. The transportation company collects the money at the National Bank and transports it directly from the National Bank to the banks. Returned money is directly transported from the banks to the National Bank. The National Bank has two suppliers of money. Namely, the National Coin for coins and a printing office for the notes. An EDI system is used for communication between these suppliers and the National Bank. Coins and notes are transported from the suppliers to the National Bank by trucks of the suppliers.

Exercise 1A (5 credits) Indicate 5 logistics costs that might occur in this supply chain of money. ANSWER TO QUESTION 1A  

2  

Exercise 1B (5 credits)  

Draw a figure to describe this cash supply chain. Indicate clearly all flows of money and all flows of information. ANSWER TO QUESTION 1B

 

3  

Exercise 1C (7 credits)

Last year a bank asked a consulting company to analyse its operation. The consultant’s report, however, ended up at the bottom of a drawer. The new manager of the bank has just discovered the report. Unfortunately, the average service time per customer appears to be missing in the report. All other statistics are known and given in the table below. Last year the bank was using 5 tellers with identically skilled employees to serve the customers. Customers are waiting in a single queue to be served by one of the 5 employees. Average service time per customer Not known Arrival rate 50 customers per hour (Poisson distributed) Number of queues 1 Number of tellers 5 (with identically skilled employees) Utilisation 91%

What is the average service time per customer in this system as estimated by means of using deterministic performance estimation techniques? Support your answer with calculations. ANSWER TO QUESTION 1C

4  

Exercise 1D (8 credits) Below you can find 25 observations of processing times of a machine for coin minting. 1 3 5 7 9 7 6 4 2 5 4 3 8 8 8 4 3 7 8 9 2 10 3 3 2

a. Formulate a discrete empirical distribution with 10 groups based on those observations. Support your answer with calculations. (3 credits)

ANSWER TO QUESTION 1D.a

b. Formulate a discrete empirical distribution with 2 groups based on those observations. (3 credits)

ANSWER TO QUESTION 1D.b

c. How can you estimate the processing times with a single deterministic value? (2 credits) ANSWER TO QUESTION 1D.c

5  

Exercise 2 Supply Chain Modelling (15 credits)

Exercise 2A (10 credits) Suppose you have 7 full wine bottles, 7 half-full, and 7 empty. You would like to divide the 21 bottles among three individual so that each will receive exactly 7. Additionally, each individual must receive the same quantity of wine. Express the problem as an integer linear programming model. Explain your answer briefly. (hint: Use a dummy objective function in which all the objective coefficients are zeros). ANSWER TO QUESTION 2A

6  

Exercise 2B (5 credits) YourFurniture manufactures two products on two machines. A unit of product 1 requires 2 hours on machine 1 and 1 hour on machine 2. For product 2, one unit requires 1 hours on machine 1 and 3 hours on machine 2. The revenues per unit of products 1 and 2 are 30 euro and 20 euro respectively. The total daily processing time available for each machine is 8 hours. Letting x1 and x2 represent the daily number of units of products 1 and 2, respectively, the LP model is given as:

30 20 Subject to

2 8 3 8 , 0

A suggestion is made to increase the daily capacity of machine 1 from 8 to 9 hours at an additional cost of 10 euro. Would you advise the management of YourFurniture to make this change? Clearly show how you have obtained your answer. ANSWER TO QUESTION 2B

7  

Exercise 3 Forecasting (10 credits)

Exercise 3A (2 credits) Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four units less than actual demand. The next forecast is 66.6. What is the value of the smoothing constant α? Explain how you have obtained your answer. ANSWER TO QUESTION 3A

Exercise 3B (8 credits) A manager has been using a certain technique to forecast demand for gallons of ice cream for the past six months. Predicted and actual demand are shown below.

Month Predicted Demand Actual Demand January 87 80 February 88 79 March 87 82 April 89 91 May 90 95 June 92 110

a. Would a naive forecast have produced better results? Explain how you have obtained

your answer. (4 credits) ANSWER TO QUESTION 3a

8  

ANSWER TO QUESTION 3a CONTINUED

b. Given the sales data and type of product, what approach would you suggest to

management as alternative option and what are important actions to take by management enabling applying that approach? (4 credits)

ANSWER TO QUESTION 3b

 

9  

Exercise 4 Facility location (10 credits) A region in Spain includes six towns that need emergency ambulance service. In each town a station can be opened. Because of the proximity of some of the towns, a single station may, however, serve more than one town. There is a strict constraint that the station must be within 18 minutes of driving time from the towns it serves. The following table gives the driving times in minutes among the six towns. The objective is to open the smallest number of stations meeting such that the constraint is met.

Town/Town 1 2 3 4 5 6 1 0 19 23 17 20 25 2 19 0 22 13 22 11 3 23 22 0 60 17 20 4 17 13 60 0 55 17 5 20 22 17 55 0 12 6 25 11 20 17 12 0

Formulate this problem as a facilities location problem. Cleary define your decision variables. Explain your answer briefly. ANSWER TO QUESTION 4

10  

Exercise 5 TSP and Vehicle Routing (15 credits) A courier uses the local public transportation to visit 8 customers in a city for product delivery. The tour starts and ends at a centrally located hub. The courier wants to spend the least money on public transportation. a. How can you formulate the “cities” and the “distances” in this problem enabling to

model the problem as a TSP? (5 credits) ANSWER TO QUESTION 5A

The courier company has also a single truck that is stationed at the central hub. Each day orders of individual customers arrive in the warehouse management system of the company. The geographical locations of these customers are known. Routing planning techniques are used to derive a single route starting and ending at the central hub, visiting each customer exactly once while aiming to minimize total route times. Today, a route has to be designed for five customers. The following matrix with distances is available.

From node i /To node j Central hub 1 2 3 4 5 Central hub - 12 14 18 10 11 1 12 - 6 5 8 7 2 14 6 - 3 7 10 3 18 5 3 - 6 8 4 10 8 7 6 - 9 5 11 7 10 9 6 -

b. Draw a network by depicting each location as a node, and each link between two

locations as an arc. Include the right transit time next to each of the arcs. (5 credits) ANSWER TO QUESTION 5B

11  

c. Apply the nearest-neighbour heuristic and indicate the resulting sequence that starts

and ends at the central location and indicate the related length of the tour. Explain your answer. (5 credits)

ANSWER TO QUESTION 5C

1  

Exam Supply Chain Network Design (EBM040A05) Jerry van Leeuwen

Questions 6, 7: 25 credits

Your name and student number:

Exercise 6

Exercise 6A (5 credits) The importance of information sharing across the supply chain has been emphasized in different streams of literature. In the study “Relational Antecedents of Information Flow Integration for Supply Chain Coordination” of Ravi Patnayakuni, Arun Rai and Nainika Seth, the relational antecedents of information flow integration have been examined. Their research model consists of three parts: Relational Orientation, Information Sharing Behavior and the Control Variables. One of the hypotheses is: Relational interaction routines positively affect information flow integration for coordination between a focal firm and its supply chain partners. Please give a short explanation of the components of this hypothesis and the reasoning behind this hypothesis. Next to that give a short explanation of the outcome of the research concerning this hypothesis. ANSWER TO QUESTION 6A

2  

 

3  

Exercise 6B (5 credits)  

In the article : “E-fulfillment and multi-channel distribution – A review” of Agatz, Fleischmann and Van Nunen, planning tasks in a multi-channel environment are mapped on two dimensions: the supply chain stage and the planning horizon. Along the first dimension the authors distinguish the following four supply chain stages: Sales, Delivery, Warehousing and Purchasing. Because of the close interaction between sales & delivery and warehousing & purchasing, the authors discuss both groups together and derive issues for both groups in E-fulfillment and multi-channel distribution. Concerning sales & delivery with a focus on Delivery service design the researchers come up with some issues concerning E-fulfillment (3) and Multi-channel (2). What are those issues? Provide a short explanation.  

ANSWER TO QUESTION 6B

4  

 

Exercise 7 In the article “Systems Collaboration and Strategic Collaboration: Their Impacts on Supply Chain Responsiveness and Market Performance “, Kim and Lee examines the multiple roles of systems collaboration and strategic collaboration, and how they directly and indirectly influence a firm’s supply chain responsiveness and market performance

Delone and Mclean published their widely cited IS Succes Model. Additionally, Petter, Delone, McLean published their article “ Information Systems Sucess: The Quest for the independent Variables “. In the latter article, the authors identify 43 specific variables posited to influence the different dimensions of IS success, and they categorize these succes factors into five categories based on the Leavitt Diamond of Organizational Change (source). Next to that the authors identified 15 success factors that consistently have been found to influence IS sucess.

5  

Exercise 7A (5 credits)

Explain the conceptual framework of Kim and Lee by mentioning the measurement items (7 plus 1 control variable) of this conceptual framework, the relation between the different items and a short explanation of those items ANSWER TO QUESTION 7A    

6  

Exercise 7B (5 credits)

Explain the update DeLone and McLean made to the framework in their article “IS Success” by mentioning the IS Success Variables (6) of the framework, the relation between the different variables and a short explanation of those variables ANSWER TO QUESTION 7B

7  

Exercise 7C (5 credits) In the lecture about IT Systems we discussed the differences between the articles of Kim and Lee (2010) and Petter, DeLone and McLean (2013). Furthermore, we discussed the similarities between both articles. Please mention the differences and the similaraties between both articles by providing short explanations. ANSWER TO QUESTION 7C