According to Marshall Fisher’s framework, innovative products feature short life cycles, high profit margins, and highly volatile demand. An efficient supply chain focuses on cost minimization, which leads to stockouts and lost sales when demand spikes. A responsive supply chain uses buffer capacity, fast transportation modes, and flexible manufacturing to react quickly to market signals, maximizing revenue despite higher operational costs. Question 2: The Bullwhip Effect
Which metric measures the proportion of customer demand met immediately from on-hand inventory? A) Fill rate (volume) B) Service level (cycle) C) Stockout frequency D) On-time delivery
Aligning competitive strategy (cost leadership vs. responsiveness) with supply chain capabilities.
(10 marks) EOQ with quantity discounts A company has annual demand of 24,000 units, ordering cost $80 per order, and holding cost 20% of unit cost per year. Unit price is $10 if order < 5,000 units, and $9 if order ≥ 5,000 units. Determine the cost-minimizing order quantity and the total annual relevant cost. (Show calculations; assume continuous-time EOQ.) supply chain management midterm exam questions
"Define the three main flows in a supply chain: Product/Material, Information, and Financial." 2. Supply Chain Drivers and Metrics
"Explain the concept of Cross-Docking and the logistics scenarios where it is most beneficial."
Calculating inventory turns, cash-to-cash cycle time, fill rates, and order cycle times. 3. Inventory Management Question 2: The Bullwhip Effect Which metric measures
Total Productivity=Units ProducedInput Resources (e.g., Hours × Machines)Total Productivity equals the fraction with numerator Units Produced and denominator Input Resources (e.g., Hours cross Machines) end-fraction
EOQ=2DSH=2×20,000×15010=6,000,00010=600,000≈774.6 unitsEOQ equals the square root of the fraction with numerator 2 cap D cap S and denominator cap H end-fraction end-root equals the square root of the fraction with numerator 2 cross 20 comma 000 cross 150 and denominator 10 end-fraction end-root equals the square root of the fraction with numerator 6 comma 000 comma 000 and denominator 10 end-fraction end-root equals the square root of 600 comma 000 end-root is approximately equal to 774.6 units The optimal order quantity is . 2. Calculate Total Annual Cost (TC):
Reduced stockouts because generic inventory can be allocated flexibly to match precise real-time demand. (10 marks) EOQ with quantity discounts A company
Every tier updates its own forecast based on immediate downstream orders, inflating safety stock.
What or formulas (like safety stock or regression forecasting) are emphasized in your syllabus?
Driven by temporary promotional discounts that cause buyers to purchase inventory in bulk. Mitigation: Shift to an Every-Day-Low-Price (EDLP) strategy to stabilize ordering patterns. Section 2: Analytical & Mathematical Questions Question 3: Economic Order Quantity (EOQ) Calculation Question: A distribution center faces an annual demand ( ) of 10,000 units for a component. The ordering cost ( ) is $50 per order. The holding cost ( ) is $2 per unit per year. Calculate the Economic Order Quantity (EOQ).
Answer: C (Order processing fees are part of ordering/setup costs).
The final and most difficult section of the exam is the mini-case. Here, you are given two paragraphs about a struggling company (e.g., a bike manufacturer with long lead times, or a grocery chain with stockouts). The question will be: "Diagnose the three primary supply chain issues and propose a solution for each."