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To determine: Whether the likelihood of choosing more suppliers increase or decrease when the probability of super-event risk decrease.
Introduction:
Unique-event Risk:
In unique-event risk, the disruption occurs to only one supplier. When such phenomenon occurs, one supplier can be chosen over other suppliers. Selection of more than one supplier is necessary to overcome unique-event risk.
Super-event Risk:
The disruption rate to suppliers is high in super-event risk because all suppliers are affected in super-event risk. Chances for occurrence of super-event risks are very low. However firms must make proactive arrangement to overcome super-event risks.
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Chapter 11 Solutions
Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
- Describe the supply chain for your university or college.Who are the suppliers, producers, and distributors in thissupply chain? Are there different supplier tiers? Howwould you evaluate this supply chain? Does inventory evenexist, and if it does, what form does it take?arrow_forwardA business marketer (who is a potential supplier) is keen to supply cold-rolled (CR) steel coils to a major passenger car manufacturer, who has been buying the same material from three other suppliers on regular basis for the past few years. As per the purchase policy, the car manufacturer cannot buy any material from more than three suppliers. What should the business marketer do to supply CR steel coils to the major passenger car manufacturer?arrow_forwarddoes supply chains with higher roi are performing better that others? or there are other measures that should be considered?arrow_forward
- Do you agree that good relationship with suppliers in reverse logistics system will improve firmperformance? Why?arrow_forwardK Kamal Fatehl production manager of Kennesaw Manufacturing, finds his profit at $30,800 (as shown in the statement below) inadequate for expanding his business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve profit line to $40,800 so he can obtain the bank's approval for the loan. % of sales Sales 280,000 100% Cost of supply chain purchases 182,000 65% Other production costs 39,200 14% 10% Fixed costs Profit 28,000 30,800 11% a) What percentage improvement is needed in a supply chain strategy for profit to improve to $40,800? What is the cost of materialarrow_forwardExplain Elastic demand?arrow_forward
- One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house…arrow_forwardBriefly describe the primary risk mitigation strategies based on the idea of flexibility that supply chain managers can use.arrow_forwardHi, I am looking for the formula for calculating maximum acceptable purchase price in a make or buy situation. The amount of units being produced is unknown. What is known are the variable cost per unit and fixed cost per unit of existing manufacturer, as well as the price to obtain the product from another supplier. Thanks!arrow_forward
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