A company called TransCar produces child toys and located in Cikarang, West Java province.

Most
of the raw materials needed for the products are supplied by several companies in Java and
Sumatra islands. However, some critical components are still supplied by Chinese and Malaysian
companies. TransCar markets its products through conventional toy stores, and via the e-
commerce platforms. The COVID-19 pandemic has affected TransCar operations due to lockdowns
and social restrictions implemented in most countries around the world, and this circumstance
forces the company to rethink about its supply chain structure. a. Should TransCar change its
supply chain structure? Explain your answer! (10%)

Whether TransCar should change its supply chain structure depends on various
factors and a thorough analysis of its current situation. Here are some considerations
that may help in making a decision:

1. Dependency on Chinese and Malaysian Suppliers:

 Evaluate the risk associated with depending on Chinese and Malaysian
suppliers for critical components. The COVID-19 pandemic has
highlighted the vulnerability of supply chains that rely heavily on a
single region or country. If there is a high risk of disruptions from these
suppliers, TransCar may need to diversify its sources.
2. Resilience and Flexibility:
 Assess how resilient and flexible the current supply chain is to
disruptions. A more diversified supply chain that includes local and
regional suppliers might enhance resilience and provide the company
with more flexibility in responding to unexpected events like the
pandemic.
3. Cost Considerations:
 Consider the cost implications of changing the supply chain structure.
While diversification may enhance resilience, it could also lead to
increased costs. Evaluate whether the benefits in terms of risk
mitigation outweigh the additional expenses.
4. Local Sourcing:
 Explore the possibility of increasing reliance on local suppliers,
especially for raw materials. Local suppliers may be more accessible
during crises and can contribute to a more sustainable and resilient
supply chain.
5. E-commerce Strategy:
 Given the impact of the COVID-19 pandemic on conventional retail,
consider the role of e-commerce in TransCar's distribution strategy. If
there is a shift towards online sales, it may affect the logistics and
distribution aspects of the supply chain.
6. Adaptability to Changing Market Conditions:
 Assess how well the current supply chain structure adapts to changing
market conditions. The pandemic has altered consumer behavior, and
TransCar needs to ensure its supply chain can meet evolving demands.
 7. Regulatory Compliance:
 Consider any changes in regulations or trade policies that may impact
the existing supply chain structure. A review of compliance with
regulations and potential risks related to international suppliers is
essential.
8. Long-term Strategy:
 Evaluate the long-term strategic goals of TransCar. If the company aims
for sustainability, resilience, and reduced environmental impact, it
might consider changes in the supply chain structure to align with
these objectives.

In conclusion, whether TransCar should change its supply chain structure depends on
a holistic evaluation of the factors mentioned above. The decision should align with
the company's goals, risk tolerance, and the need for adaptability in a dynamic
business environment.

One of the child toys that is very popular is Toy Car. To produce 1 unit of Toy Car, it needs 2 units of
Wheel Assembly, and 1 unit of Body. To make 1 unit of Wheel Assembly it needs 1 unit of Axle, 2
units of Wheel, and 4 units of Screw. The table below gives the information about the lead time of
each product and component and their on-hand inventory. Page 5 of 7 Product/ component Lead
Time (weeks) On-hand Inventory (units) Lot Sizing Technique Toy Car 1 45 Lot for lot Wheel
Assembly 1 10 Lot for lot Body 3 20 Lot for lot Axle 1 75 Lot for lot Wheel 2 50 Lot for lot Screw 1
100 Lot for lot From the sales planning, there should be 50 units of Toy Car in week 5, 100 units in
week 6, 60 units in week 8. i. Construct the bill of material diagram from the above information
(5%) ii. Make an MRP plan (net requirement planning) for all items to accommodate the
requirements from the sales department (use the available form). (10%)
. Competitive Strategy Chosen by Zara:

Zara employs a strategy of "Fast Fashion" as its competitive strategy. The key
elements of this strategy include:

1. Rapid Responsiveness: Zara is highly responsive to changing fashion trends,

with design-to-sales cycle times of four to six weeks, compared to the industry
average of over six months.
2. Frequent Product Refresh: Zara introduces new designs every week and
changes 75 percent of its merchandise display every three to four weeks,
allowing it to match customer preferences closely.
3. Reduced Inventory and Markdowns: By manufacturing in Europe and Asia,
postponing production decisions until after the sales season starts, and
investing in information technology, Zara reduces inventories and forecast
errors. This leads to fewer markdowns compared to competitors.
4. Global Distribution Network: Zara's distribution strategy involves
distributing products to stores worldwide from eight distribution centers in
Spain, with average delivery times of 24 to 48 hours, enabling store inventory
to closely match customer demand.

b. Activity Mapping Diagram for Zara:

The activity mapping diagram illustrates how Zara implements its competitive
c. Decision Tree and Expected Monetary Value (EMV) Calculation:

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Keep Old Model ($6M) | 70% "Receptive" v +----------------------------+ | | Design Replacement Internally
Acquire New Design ($10M if "Receptive") ($4M if "Receptive") | 30% "Neutral" | 30% "Neutral" v v -$3M if
"Neutral" -$1M if "Neutral"

Expected Monetary Value (EMV) Calculation:

  EMV for Keeping the Old Model: $6M * 1 = $6M
 EMV for Designing Replacement Internally: ($10M * 0.7) + (-$3M * 0.3) =
$4.1M
 EMV for Acquiring New Design: ($4M * 0.7) + (-$1M * 0.3) = $2.3M

Conclusion: The action with the highest Expected Monetary Value is to Design the
Replacement Internally, which yields an expected value of $4.1 million.