MID-TERM EXAMINATION

Term : Spring 2020

Course Name : Global Supply Chain Management
Course Code : BSA308
Date/Duration : 10/4/2020
Total Marks : 100 (convert to 20%)
Mode : On-line
Instructions to Candidates:

 Each question is out of 40, 30, 30 marks, for question 1, 2, and 3, respectively.

 Answer all questions.

 Question Booklet includes 5 pages (cover page included).

 Scanned all pages of answer scripts and submit to my official email below

 All answers must be submitted on line within 2 days (48 hours) after the exam
through my email at: mosses.enjob@ttu.edu.vn. Marks will be deducted for late
submission at instructor’s discretions.

 To maintain quality of works students are advised to answer on their own

knowledge and understanding of subject matters. Discussion and sharing of notes
are strictly prohibited.

Student Name: Nguyen Van Chieu__________________________

Student ID : 1701007

Question 1 [40 marks ]

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A) Choose the correct answer. ( 1 marks each= 10 marks)
Notice: Underline options are my answers.
1) A company’s competitive strategy
a. defines the set of customer needs that it seeks to satisfy through its products
and services.
b. specifies the portfolio of new products that it will try to develop.
c. specifies how the market will be segmented and how the product will be
positioned, priced, and promoted.
d. determines the nature of procurement and transportation of materials as well as
manufacture and distribution of the product.

2) A company’s supply chain strategy

a. defines the set of customer needs that it seeks to satisfy through its products
and services.
b. specifies the portfolio of new products that it will try to develop.
c. specifies how the market will be segmented and how the product will be
positioned, priced, and promoted.
d. determines the nature of procurement and transportation of materials as well
as manufacture and distribution of the product.

3) The warehousing methodology in which all the different types of products needed to
perform a particular job or satisfy a particular type of customer are stored together is
a. warehouse unit storage.
b. stock keeping unit (SKU) storage.
c. job lot storage.
d. cross-docking.

4) The average amount of inventory used to satisfy demand between receipt of supplier
shipments is referred to as
a. cycle inventory.
b. safety inventory.
c. seasonal inventory.
d. sourcing.

5) On which dimensions should the performance of a distribution network be evaluated at the

highest level?
a. Profitability of individual supply chain components
b. Efficiency of overall supply chain network
c. Customer needs that are met
d. Cost of meeting customer needs
e. c and d only

6) Supply chain network design decisions classified as facility role are concerned with
a. what processes are performed at each facility.
b. where facilities should be located.
c. how much capacity should be allocated to each facility.
d. what markets each facility should serve and which supply sources should feed
each facility.

7) Customer order entry is

a. the point in time when the customer has access to choices and makes a decision
regarding a purchase.

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 b. the customer informing the retailer of what they want to purchase and the retailer
allocating product to the customer.
c. the process where product is prepared and sent to the customer.
d. the process where the customer receives the product and takes ownership.
e. none of the above

8) Decisions made during the supply chain design phase regarding significant investments in
the supply chain, such as the number and size of plants to build, the number of trucks to
purchase or lease, and whether to build or lease warehouse space,
a. are realigned every few weeks.
b. only remain in place for several years.
c. rarely remain in place for several years.
d. only remain in place for a few weeks.
e. often remain in place for several years.

9) Short-term contracts for both warehousing and transportation requirements will be more
effective
a. if the demand and price of warehousing do not change in the future.
b. if the price of warehousing goes up in the future.
c. if either demand or the price of warehousing drops in the future .
d. only if demand drops in the future.

10) A firm may choose to build a flexible global supply chain even in the presence of little
demand or supply uncertainty if
a. certainty exists in both exchange rates and prices.
b. certainty exists in exchange rates or prices.
c. uncertainty exists in both exchange rates and prices.
d. uncertainty exists in exchange rates or prices .
e. uncertainty exists only in exchange rates.

B) Omni Channel Retailing-

Channel retailing has the potential to combine the complementary strengths of

physical stores and online channel. Physical stores are good at letting the
customers experience high information complexity products in person. They are
also cost effective at selling products with predictable demand. The online
channel, in contrast, is cost effective at selling product with unpredictable
demand but cannot let customers experience high information complexity
products. An effective portfolio results if brick-and-mortar stores sell predictable
demand items, serve as showroom for high information complexity items with
unpredictable demand, and serve as pickup locations for the online channel,
while the online channel delivers unpredictable demand items to the customer.

Using the above scenario as guidelines to devise a retailing strategy, answer the
following questions; 1 to 5:

i-) What difference in the retail environment may justify the fact that the fast- moving
consumer goods supply chain in India has far more distributors that it has in the
United States? (6 marks)

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 The biggest difference leading to the difference in the number of distributors
for the fast-moving consumer goods in the US and in India is the size of the retail
stores. More than 1 billion Indians are primarily served by small retail stores. A large
number of small retailers requires a large number of distributors to serve them. While
more than 300 million people in the United States are served by large retailers with
large buildings with heaps of goods like Walmart, Costco, Target and so on.
Although, with the development of infrastructure, the change in customers' buying
habits, but for big shopping malls to dominate the fast-moving consumer goods
market, it still takes a long time in India.

ii-) A specialty chemical company is considering expanding its operations into Brazil,
where five companies dominate the consumption of specialty chemicals. What sort of
distribution network should this company use? (6 marks)
In this case, the specialty chemical company is said to be a B2B company with
the task of serving five other companies to expand the market in Brazil. The
characteristic of the supply chain in this case is that there is a fixed demand from five
companies and the amount of consumption company is not too much (only 5
consumption companies). It is not necessary to invest a large amount in logistical
infrastructure. The specialty chemical company can use a short supply chain, without
the involvement of distributors, to make more profit.

iii-) What types of distribution networks are typically best suited for commodity
items? Justify your view point. (6 marks)
A commodity product refers to any product which is similar to other products
of the same variant (that are available from other manufacturers). For instance, oil,
beef, salt, sugar can be termed as a commodity product. The characteristic of this type
of goods is served by a large number of suppliers. Therefore, customer service speed
is a very important thing. If the customers are not satisfied with their needs, they will
find another supplier. For physical store location, retail storage and continuous
replenishment for customer pickup are the most suited. For E-commerce, last-mile
delivery needs to be focused. In addition, the use of omni channel is also an answer in
this case.

iv-) In the future, do you see the value added by distributors decreasing, increasing or
staying about the same? (6 marks)
In my opinion, in the future, the value added by distributors will decrease.
Because suppliers always seek to eliminate distributors to increase profits if possible.
Using the shorter supply chain also means that products can reach customers faster
with lower prices, and suppliers can communicate with customers better.
Consequently, distributors are gradually being depreciated. Besides, with today's
fierce competition, inefficient distributors will be immediately removed.

v-) Amazon has opened bookstores and announced the opening of convenience stores.
How can these traditional retail channels allow Amazon to complement its online
channel effectively? (6 marks)
Amazon is the world's most successful e-commerce company. With the
support of physical book stores and convenience stores, Amazon plans to build Omni
channels, which online channels and physical channels will coordinate and support
each other. Building physical stores will speed up Amazon's delivery times, and help

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 increase the customer experience. In addition, these physical stores also help Amazon
compete directly and gain market share from other retail companies.

Question 2 [30 marks ]

Refer to the case study – It will be attached to this and send to students
by email. Rubric has been attached for evaluation purpose

Title: Supply chain management and logistics: A Case Study of Pepsi

International.

Problem 1: Gaps in Demand and Supply.

Pepsi is facing a major challenge: the gap in supply and demand. The gap in
demand comes about due to a distribution failure, which means customers may
sometimes not be able to buy Pepsi in retail stores. This leads to Pepsi losing the
profits they should have had. About the gap in supply, it exists because of the channel
members' lack of expertise in the distribution process. Besides, Pepsi made a big
mistake when they ignore rural customers, where its segment's size is growing very
fast.
Solution 1: Reducing the Gaps in Demand and Supply.
The biggest problem that Pepsi needs to solve to reduce the gaps in supply
and demand is to build a more efficient distribution system. First of all, Pepsi needs to
make more effort to tailor distribution to meet the demands of rural customers.
Although this market gives Pepsi lower profits, it is growing very fast. It is important
to quickly gain market share in rural Ukraine because Coca Cola will quickly pay
attention to this market. In the beginning, Walmart also started in small towns with
less than 50,000 people, where K-mart resolutely ignored, and then defeated rival K-
mart. Pepsi needs to pay attention to this lesson.
In addition, Pepsi needs to work closely with local distributors. It is necessary to have
Pepsi marketing experts participate in direct communication with local distributors. In
addition, Pepsi needs to build knowledge-sharing channels to gain feedback from
customers.

Problem 2: Channel conflicts.

Channel conflicts occur because Pepsi is too dependent on local channels. The
power to control the supply chain is not in Pepsi's hands. Local channels have not
worked effectively to achieve the goals that Pepsi wants. The ineffective cooperation
of Pepsi and local channels is due to differences in working culture. Local channels
lack the discipline to follow strategies and work closely with Pepsi. Instead, they
focus on short-term profits.
Solution 2: Reducing channel conflicts.
To increase supply chain efficiency, power must be in the hands of Pepsi
marketing managers. In order to regain power, Pepsi needs to build strong
relationships with local channels by building trust with them. First, it is necessary to

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 make them understand that if they pursue the right strategy, they will gain more
profits. In addition, Pepsi needs to focus on understanding the distributors' corporate
culture, which will make it easier to gain trust. Ultimately, Pepsi needs to make the
tough decision of only cooperating with distributors maintaining good relationships
and following Pepsi's strategies. The remaining ineffective distributors will have to
stop because they are damaging Pepsi's brand image and not serving customers
effectively.

Problem 3: Environmental Impact.

The third problem Pepsi faces is environmental issues. The low-quality
infrastructure system in Ukraine has affected Pepsi's business. Poor quality roads and
traffic congestion in Ukraine have affected last mile delivery. In addition, the process
of transporting goods from the port to the bottling factory by rail is also affected.
Because in the winter, the railway cannot be used. This directly affects the production
and consumption of Pepsi's goods.
Solution 3: Reducing environmental impacts.
Pepsi can face environmental impact challenges directly by improving
infrastructure in Ukraine. However, this needs great support from the government.
Pepsi can support the Ukrainian government partly and gain long-term profits.
Upgrading the infrastructure will also create a positive effect that attracts consumers.
In addition, to minimize transit time and the impact of the environment, Pepsi may
choose to build a denser distribution system.

Problem 4: Theft
Theft is a frequent problem facing in Ukraine because of the loose law
enforcement system. First, the theft occurred at the port. Therefore, it costs money to
protect the concentrate. Next, the theft also occurred at bottling plants and
distributors. This became a cost burden for Pepsi.
Solution 4: Reduce theft.
This problem is very difficult to solve completely. First of all, Pepsi can
minimize theft by installing cameras where necessary. However, this costs quite a lot
and is not quite effective. Things could only get better when Pepsi built its own plants
and set strict management rules.

Question 3 [30 marks ]

A). In designing network design in the supply chain, there are factors that can be
controlled, and some are uncontrollable However, there are a wide variety of
factors, of which some are quantifiable which can directly be included in
network design models.

i) Identify these factors and discuss how they will influence supply chain network
design decisions. (5 marks)
Strategic Factors. A company's strategy plays an important role in making
decisions in the supply chain network design. If the company's strategy is focused on
the speed of customer service, the supply chain network can be costly to select
favorable sales locations and build a dense distribution network. If the company's
strategy focuses on cost savings, then the company will focus on cutting
intermediaries.

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 Technological factors. Technology factors that create special characteristics
need to be considered when making decisions on designing the supply chain network.
Products with less technological elements such as E-books, audio books, music,
software can easily be delivered to customers via a website
Macroeconomic factors. These factors include tariffs and tax incentives,
exchange rate and demand risk, freight and fuel costs, which are not always stable.
These factors in particular affect the construction of global supply chains.
Political Factors. The stability of a nation plays an important role for
companies in selecting markets to expand and develop. A country with political
stability and clear rules of trade law will make it easier for companies to implement
supply chains.
Infrastructure factors. The availability of good infrastructure is an important
prerequisite to locating a facility in a given area. Poor infrastructure adds to the cost
of doing business from a given location.
Competitive Factors. The company must consider the strategy, scale and
location of competitors when they design the supply chain network. The main
decision companies make is whether to put their facilities far or near their
competitors. This decision is influenced by the form of competition and other factors
such as raw material and labor availability.
Customer response time and local presence. Companies always try to
shorten customer response time to the lowest possible level. However, this also
requires the costs of building a delivery system and physical store location.
Depending on the type of business, local presence is different. For example,
supermarket chains often have stores that are larger but less densely distributed than
convenience stores.
Logistics and facility costs. Logistics and facility costs will vary according to
the number of facilities, location and capacity allocation, which the company needs to
consider carefully when designing the supply chain network. The increased number of
facilities will lead to increased facility costs but reduce logistics costs. However, the
number of facilities increases to the point where economies of scale are lost, the
logistics costs will increase.
ii) Suggest the framework, and discuss the strategy used, and show examples each
phase of the framework. (5 marks)

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 Framework for network design decisions has 4 phases:
Phase I: Define a supply chain strategy/design.
The objective of this phase is to define a companies’ broad supply chain
design. This phase focus on the competitive strategy and the support of supply chain
network to the competitive strategy. Next, the evolution of global competition and
whether competitors will be local or global players must be forecasted. In addition,
managers must identify the internal constraint on capital, growth strategy, and existing
network.
Phase II: Define the regional facility configuration
The objective of this phase is to identify regions where facilities will be
located, their potential roles and their approximate capacity. Firstly, this phase starts
with a forecast of the demand by country or region. Secondly, managers will identify
the role of economies of scale or scope in reducing costs. Thirdly, managers need to
identify demand risk, exchange-rate risk, and political risk. Besides, the regional
tariffs, any requirement for local production, tax incentives, and any export or import
restrictions must be notified. Then, managers must identify competitors and decide
whether their facilities should be close or far from competitors. Finally, based on all
this information, managers identify the regional facility configuration for the supply
chain network.
Phase III: Select a set of desirable potential sites.
The objective of phase III is to select a set of desirable potential sites within
region where facilities are to be located. Those sites should be selected based on an
analysis of infrastructure availability to support the production methods (skill needs,
response time).
Phase IV: Location choices.
In this phase, managers will choose a precise location from the potential sites.

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B) It is critical that global sourcing decisions be made while accounting for total
cost. Beside unit cost, total cost should include the impact of global sourcing on
freight, inventories, lead time, quality, on time delivery, minimum order
quantity, working capital, and stock-outs. Other factors to be considered include
the impact of supply chain visibility, order communication, invoicing errors, and
the need for currency hedging. Offshoring typically lowers labor and fixed costs
but increases risk, freight costs, and working capital.

i) Discuss relevant risks and explain different strategies that may be used to mitigate
the risk in global supply chain (5 marks)
This below table is the risk mitigation strategy that may be used to mitigate the
relevant risk:

Risk Mitigation Strategy Tailored Strategies

Increase capacity Focus on low-cost, decentralized capacity for predictable
demand. Build centralized capacity for unpredictable demand.
Increase decentralization as cost of capacity drops
Get redundant suppliers More redundant supply for high-volume products, less
redundancy for low volume products. Centralize redundancy for
low-volume products in a few flexible suppliers.
Increase responsiveness Favor cost over responsiveness for commodity products. Favor
responsiveness over cost for short–life cycle products.
Increase inventory Decentralize inventory of predictable, lower-value products.
Centralize inventory of less predictable, higher-value products
Increase flexibility Favor cost over flexibility for predictable, high-volume
products. Favor flexibility for unpredictable, low-volume
products. Centralize flexibility in a few locations if it is
expensive.
Pool or aggregate demand Increase aggregation as unpredictability grows
Increase source capability Prefer capability over cost for high-value, high-risk products.
Favor cost over capability for low-value commodity products.
Centralize high capability in flexible source if possible.

C) One of the determining factors for a company to be successful is to achieve

strategic fit where both their supply chain and competitive strategies have
aligned goals.

i) Explain why achieving strategic fit is critical to the company overall success?
( 5 marks)
A lack of strategic fit means there is a conflict between the competitive and
supply chain strategies, causing the mismatch between the supply chain and the
customer needs. Then, it will lead to a reduction in supply chain surplus and
decreasing supply chain profitability. Strategic fit ensures that all functions in
companies and stages in the supply chain are consistent and targeting the same goal,
especially customer needs.

ii) Describe the three (3) steps that a company can follow to achieve strategic
steps between it supply chain and its competitive strategy. (5 marks)
Strategic fit requires competitive strategies and supply chain strategies work
together to achieve the goals. To achieve strategic fit, companies must follow three
steps:

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 1. Understanding the customer and supply chain uncertainty: Companies need to
understand the customer needs of the targeted segment and the uncertainty
creating from those needs. The needs help companies to identify the desired
cost and service requirements. Understanding the uncertainty helps companies
to prepare for the unpredictability of demand and supply.
2. Understanding the supply chain capabilities: Each supply chain types are
designed for different tasks. Companies need to understand the task
requirements to form a proper supply chain type.
3. Achieving strategic fit: If the supply chain mismatches with the desired
customer needs, the company will choose either restructure the supply chain to
support the competitive strategy or alter its competitive strategy.

iii) Discuss the importance of expanding the strategic fit across the supply chain.
(5 marks)
The scope of strategic fit enforced to the functions and stages within a supply
chain that coordinate strategy and target a common goal. When the scope is narrow,
individual functions try to optimize their performance based on their own goals. This
practice often results in conflicting actions that reduce the supply chain surplus. As
the scope of strategic fit is enlarged to include the entire supply chain, actions are
evaluated based on their impact on overall supply chain performance, which helps
increase supply chain surplus.

<<<Good Luck>>>>

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