North Campus

Final Examination Spring Semester 2020

Subject Supply Chain Management Program BBA-H

Faculty Tauseef Iqbal Khan Section Code 1123
Maximum
No. of Students 58 30
Marks
Start date & Time June 8th, 2020 at 12:00 AM Submission June 10th,2020 by 6:00 PM
Deadline
Students should meet their submission deadline as there is no re-take or re-attempt after the deadline.

IMPORTANT INSTRUCTIONS:

Read the Instructions carefully.

 Attempt all Questions on MS-Word. Font theme and size must be Time New Romans and 12
respectively. Use line spacing 1.5.
 For Diagram, you can use paper and share a clear visible snapshot in the same Answer Sheet.
 Arrange questions and their subsequent parts (in case question has many parts) in sequence.
 Avoid writing paragraph instead you are encouraged to write your answer in bullet points.
 Make sure that your answers are not plagiarized or copied from any other sources. In case of
plagiarism, you will be entitled zero marks.

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Question-1 (Marks- 5)
Independent demand is described as the demand for the finished goods by end consumers. In order to cater
the demand, raw material and ingredients are required known as components or dependent demand. The
relationship is called parent-component relationship.
Consider a finished product of your choice. Name the product you pick and represent it by alphabetic
character say ‘A’. Write the equation of factor relationship. Minimum dependent items are two and each
dependent item has at least one sub –dependent item. Calculate the number of each items required if finished
goods say ‘A’ is 100 units.

Question-2 (Marks- 5)
Consider any distributor of FMCG products. Name the distributor. Mention few inventory SKUs placed in
warehouse of that distributor. Classify these inventories according to ABC Inventory classification. Mention
your basis of classification. What are the advantages of implementing ABC Inventory method?

Question-3 (Marks- 10)

Nestle is the world’s leading food and nutrition company. In Pakistan, the head office is based in Lahore
whereas regional offices are in Karachi and other cities. Production facilities are located in interior Punjab.
The company is structured on Horizontal Integration model. Refer to the below data,
 Raw Materials are acquired via local resources as well as internationally through import channels.
 The company has strong distribution networks and it ensures availability of its product in entire
Pakistan.
 The finished goods are first brought in Lahore warehouse which consolidates all products and then
distributes to other regional warehouse.

You are required to draw a Supply Chain Network diagram. Identify the types of warehouse it will be
deploying across the value chain (SC Diagram). Mention the modes of transportation used at each stage of
supply chain. (Hint: Use Logistics Drivers to support your answer).
You are encouraged to draw a table to summarize your answer.

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Question-4 (Marks- 5)
The Hascomb Business Solution purchases a critical component from one of its key suppliers. The
operations manager wants to determine the economic order quantity, along with when to reorder, to ensure
the annual inventory cost is minimized. The following information was obtained from historical data.
Annual requirements (R) = ---- (Four Digits of your enrolment number say 1234) 
Setup cost (S) = PKR 100 per order
Holding rate (k) =20% per year
Unit cost (C) =PKR 20 per unit
Order lead time (LT) = 6 days
Number of days per month = 30 days
Determine EOQ, Total Annual Inventory Cost, Reordering points, Number of orders and Time between
orders.
How would you justify that your calculated EOQ is correct?

Question-5 (Marks- 5)
Please read below scenarios and mention key takeaways based on your SCM learning . You are
encouraged to write your answer in bullet points.

Scenario-1
Dell is one of the largest PC manufacturers in the world, and one of the main reasons for Dell’s success is
the way it manages its supply chain. Dell’s supply chain model is based on direct sales to customers. This
model enables Dell to exert much more control over its supply chain than many other companies, and in
addition, get direct information about its customers. Based on this information, Dell can make educated
decisions that will affect the entire supply chain. Dell also provides its suppliers real-time information to
ensure that they keep the right levels of inventory of the right components. Dell’s close contact with
customers as well as its understanding of customers’ needs allows it to develop better forecasts and thus
keep lower inventories. This gives Dell several advantages over the competition, including lower cost of
capital invested in inventories, the ability to go faster to market with new components (such as Intel
chips), and ensuring that defects are not introduced into a large quantity of products.

Scenario-2
Zara, the fastest-growing fashion company in the world—located in La Coruna, Spain—has achieved
more than 20% annual growth in the years 2001 to 2006. the key to Zara’s success is its supply chain
management approach. Zara designed a fast-response supply chain for its products that incorporates all the
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different stages in its supply chain, from design and manufacturing to distribution and retailing. Due to
high demand uncertainty in the fashion industry and the high cost of mistakes, Zara’s supply chain
approach enables it to make its design and production decisions within a fashion season instead of well in
advance of a season, resulting in better response to demand.

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