1(a).

Filling petrol or diesel in our vehicles is a very common activity that

we all do regularly. With the information available openly, can you
identify the supply chain for petroleum products?

A. With the information available openly we can observe that the Supply
Chain in Petroleum Industry starts from Crude Purchase and Transport,
Crude Storage and Product Distribution via (Tanker/PL/Rail/Road)
followed by marketing the base product and Product Storage (Terminal/
Depot/ Port) and then Refining after which Supply Planning and
Distribution Planning is done before reaching to end customers.

Different Stages in Petroleum Supply chain Exploration is as below :

1. Production
2. Refining
3. Marketing
4. Consumer
5. Exploration: Seismic, geophysical and geological operations
6. Production: Drilling, reservoir, production and facilities engineering.
7. Refining : complex operation and its output is the input to marketing.
8. Marketing : The retail sale of gasoline, engine oil and other refined
products.

1©. A company is into manufacturing an antibiotic product. This is for

veterinarian purposes. During floods when animals such as cows,
buffalos, or other bovine species have digestive disorders, this medicine
is very effective. If you were to give a thought to have a supply chain
designed for this company, what will be your choice- responsiveness or
efficiency. Ideally, how will you balance these both? 

Ans : Antibiotics are medicines that have activity against bacteria. They
may function by either killing the bacteria (bactericidal) or by inhibiting
the growth and proliferation of bacteria (bacteriostatic) allowing the
animal’s immune system to more effectively fight a bacterial infection. In
either case, the bottom line is that an antibiotic treatment stops the
growth of a bacterial infection so the host (i.e. the animal) can eliminate
it. The animal can then recover and return to health.

As per the question below is the Supply Chain diagram and brief
description on Antibiotic product.
The supply of veterinary drugs in country is made up of several actors
who play distinct but complementary roles and who are mainly from the
private sector. Drug manufacturers are the first level of actors, They are
mostly based abroad and include international reputed pharmaceutical
companies which have established a market in Africa.

The primary wholesalers (or drug importers/distributors) are in the

country and they hold large-scale business dealing directly with
manufacturers. They supply drugs to secondary wholesalers and retailers,
and to some extent to the government.

The secondary wholesalers hold medium scale businesses and mainly

redistribute drugs to retailers and to AHSPs such as veterinarians and
para-veterinarians, who supply to farmers some of whom practice self-
medication.
Primary and secondary wholesalers have their main branches located in
the capital city. Drug retailers are located in the regions (or districts), and
around municipalities from where they have access to infrastructures
such as electricity. They mainly supply drugs to AHSPs and to livestock
farmers. Drug retailers consider farmers as their first-choice customers
because they pay higher prices as compared to AHSPs, who tend to
bargain for lower prices as they have better market information of the
products from wholesalers.

Secondary wholesalers and retailers stock drugs based on demand

forecasts, price, and profit margin. The transactions costs and their poor
bargaining power may result in weak incentives for them to stock a wide
variety of products or brands, leading to frequent shortage of products in
the market. The government procures veterinary products for public use,
especially livestock vaccines and acaricides, mainly from primary
wholesalers.

3Q. Below are the details of the inventory of a store dealing with
automobile spare parts. Using the concepts of ABC analysis, categorize
the spare parts into A, B, and C categories. (If required, you may have
assumptions, but do mention them in your answer) 
Ans :
1. Category A : Rod Bearing, Wind Screen, Piston Ring, Main Bearing
2. Category B : Oil Filter, Fuel Filter, Air Filter, Head lamp
3. Category C : Bumper and Bush

 A items are goods where annual consumption value is the

highest. Applying the Pareto principle (also referred to as the
80/20 rule where 80 percent of the output is determined by 20
percent of the input), they comprise a relatively small number of
items but have a relatively high consumption value. So it’s logical
that analysis and control of this class is relatively intense, since
there is the greatest potential to reduce costs or losses.

 B items are interclass items. Their consumption values are lower

than A items but higher than C items. A key point of having this
interclass group is to watch items close to A item and C item
classes that would alter their stock management policies if they
 drift closer to class A or class C. Stock management is itself a
cost. So there needs to be a balance between controls to protect
the asset class and the value at risk of loss, or the cost of analysis
and the potential value returned by reducing class costs. So, the
scope of this class and the inventory management policies are
determined by the estimated cost-benefit of class cost reduction,
and loss control systems and processes.

 C items have the lowest consumption value. This class has a

relatively high proportion of the total number of lines but with
relatively low consumption values. Logically, it’s not usually cost-
effective to deploy tight inventory controls, as the value at risk
of significant loss is relatively low and the cost of analysis would
typically yield relatively low returns.