CHAP 1: INTRODUCTION

Question 1: Please establish the supply chain which is including inbound and
outbound for any products such as paper, coffee, car, or shoe then explain in detail each
operation.
Question 2: What is Logistics? Describe the two methods of logistics.
Question 3: Briefly describe the definition of Supply Chain.
Question 4: Draw a Supply Chain for a product and answer the question: Do you
want to avoid a supply chain?
Question 5: What is the aim of logistics? Considering when you buy an item, what
kind of contents will be taken into consideration?
Question 6: What are three themes for logistics consideration. Briefly describe each
of them.
Question 7: Your business, ABC Company, has a net income of $10,000. Your total
assets equal $65,000. What is your Return on Assets (ROA)? If your net income increases to
$30,000 and your total assets remain the same, what is your ROA now? (Using the ROA
formula to calculate)
ROA = profit earned / assets employed = $10,000 / $65,000 = …%
Question 8: The cost of logistics varies widely from organization to organization.
What factors affect these costs? Are the costs fixed or can they be controlled? Explain.
Question 9: Choose a company, describe how can that company find the best balance
between service level and costs?
Question 10: The supply chain is a convenient notion, but organizations are only
really interested in making products that they can sell to customers. Provided they have
reliable supplies of materials, and reasonable transport for finished products, logistics is
irrelevant. Do you think this is true?
Question 11: For 2014, Hammer Company reports the beginning of the year total
assets of $900,000, end of the year total assets of $1,100,000, net sales of $750,000, and net
income of $150,000. Calculate the rate of return on assets for Hammer in 2014.

CHAP 2 + 3: LOCATING FACILITIES

Question 1: Which areas of the world currently have the fastest economic growth?
Why? Is this likely to change over the next twenty years?
Question 2: What are the most important factors in choosing a region or country to
work in?
Question 3: What costs should you consider when making a location decision? Is
cost always an important factor? Are costs distorted by government grants and incentives?
Question 4: What is the basic difference between infinite set and feasible set
approaches to location? Can they be used together?
 Question 5: A development company is attempting to determine the location for a
new outlet mall. The region where the outlet mall will be constructed includes four towns,
which together have a sizable population base. The grid-map coordinates of the four towns
and the population of each are as follows:

a. Determine the best location for the outlet mall using the center-of-gravity method.
b. Plot the four towns and the location of the new mall on a grid map.
Question 6: Mega-Mart, a discount store chain, wants to build a new superstore in an
area in southwest Virginia near four small towns with populations between 8000 and 42,000.
The coordinates (in miles) of these four towns and the market population in each are as
follows:

Determine the best site using the center-of-gravity technique.

Question 7: The owners of the Midlands United professional soccer team currently
located in a Midwestern city are concerned about declining attendance at their team’s games,
and they have decided to use a scoring model to help them decide which city in the south to
relocate in—Atlanta, Birmingham, Charlotte, or Durham. They have graded the possibilities
according to the following weighted criteria:
 Develop a scoring model to help the owners decide on which city to select to relocate.
Question 8: Herriott Hotels, Inc. wants to develop a new beachfront resort along the
coast of South Carolina. A number of sites are available, and the hotel chain has narrowed the
choice to five locations. They have graded their choices according to the weighted criteria
shown as follows:

Recommend a resort site based on these location factors and ratings.

Question 9: A part of a road network and population of nine towns. Where would you
start looking for a location for a new warehouse?
Distance matrix:
A B C D E F G H I
A 0 21 24 75
B 21 0
C 24 0
D 75 54 0
E 0
F 84 0
G 0
H 0
I 0
Maximu 75 54 84 75 84 84 48 55 77
m

Single location (choose min from max) G

Maximum time 48

Question 10: ABC company delivers goods to eight towns, with locations and
demands as shown below. The company wants to find a location for a logistics center that
minimizes the average delivery time to these towns. Where should the company start
looking?
 Question 11: Home-Base, a home improvement/building supply chain, is going to
choose the location of the new depot to serve its stores in seven cities—A, B, C, D, E, F, G.
The traveling time of these cities (in minutes) are shown as follows:
a) Where would you locate a depot to give the best customer service?
b) How many depots would be needed to give a maximum journey of 30 minutes?

30
B E
15
20
35 20

35
15 G
D
A

15
20
10
10 300
C F

Question 12: A new electronics factory is planned in an area that is encouraging

industrial growth. There are five alternative sites. A management team is considering these
sites and has suggested the important factors, relative weights and site scores shown below.
What is the relative importance of each factor? Which site appears best?
 CHAP 4: PLANNING RESOURCES

Question 1: Briefly describe the definition and strategies in capacity planning.

Question 2: What are two basic ways of short-term scheduling? Provide short
definitions.
Question 3: What is the bottleneck? Give an example and explain.
Question 4: Capacity is the most important decision in the design of a supply chain,
as it affects the amount of materials that can be moved. Do you find this argument
convincing?
Question 5: What decisions are involved in tactical planning for logistics?
Question 6: An industrial printing machine has 8 projects to print with the processing
times and deadline (from now) as in the Table 1 below. Complete short-term schedules for
these machine and evaluation measurements in Table 2.
Table 1: Jobs' requirements

Project Mercury Venus Earth Mars Jupiter Neptune Uranus Saturn

Processing time
2 5 3 8 4 7 10 12
(hours)
Deadline (hours
13 5 7 30 8 14 18 12
from now)
Table 2: Short-term schedules

"First come, first served" rule "Earliest due date first" rule
Project Duration Start Finish Lateness Project Duration Start Finish Lateness
 Average time in system: Average time in system:
Average lateness: Average lateness:

Question 7: A furniture company currently has 150 workers. Workers have to work
for 20 days per month and 8 hours per day. The related costs are shown as table below:

There are associated costs for

Spare transport that is not used 2 $/unit

Shortage of transport 50 $/unit
Cost of moving to this function
700 $/employee
from other jobs  HIRING
Cost of moving an employee from
this function to other jobs  500 $/employee
FIRING
Number of employee 150 Employees
Number of unit per employee 50 Units
Regular-time cost of employee 4 $/hour

The company is developing an aggregate planning base on following strategies:

Level strategy:
Month 1 2 3 4 5 6 Total
Forecasting demand 4000 6000 24000 30000 46000 10000 120000
Cummulative forecast demand
Supply rate
Cummulative supply
Unused supply
Shortage of supply
Cost of unsed supply
Cost of shortage
Number of employee
Cost of moving employees
Regular-time cost of
employees
Total cost (cost unused + cost
Choose
shortage + cost of moving +
min
regular-time cost)
 Chase strategy:
Month 1 2 3 4 5 6 Total
Forecasting demand 4000 6000 24000 30000 46000 10000 120000
Cummulative forecast demand
Supply rate
Cummulative supply
Unused supply
Shortage of supply
Cost of unsed supply
Cost of shortage
Number of employee
Cost of moving employees
Regular-time cost of
employees
Choose
Total cost
min
Support company to develop an aggregate plan and conclude which strategy can provide the
best solution?
Question 8: The bus of company A has planned their capacity in terms of ‘bus-days’.
Forecasts show expected annual demands for the next year to average 400,000 full-day
passengers and 840,000 half-day passengers. The company has 61 buses, each with an
effective capacity of 40 passengers a day for 300 days a year. Breakdowns and other
unexpected problems reduce efficiency to 90%. They employ 86 drivers who work an
average of 220 days a year, but illness and other absences reduce their efficiency to 85%. If
there is a shortage of buses the company can buy extra ones for $110,000 or hire them for
$100 a day. If there is a shortage of drivers they can recruit extra ones at a cost of $20,000 a
year, or hire them from an agency for $110 a day.
How can the company approach its tactical planning? Please recommend company A the best
plan and explain in detail the reasons for the selection.

Question 9: Company X currently has 150 workers. Company has to work 20

working days per month and 8 hour per day. Each worker can produce 70 units per period.

There are associated costs for

Spare transport that is not used 2 $/unit

Shortage of transport 50 $/unit

Cost of moving to this function $/

from other jobs 300 employee

Cost of moving an employee from 500 $/

 this function to other jobs employee

Employee
Number of employee 150 s

Number of unit per employee 70 Units

Regular-time cost of employee 4 $/hour

The company is confusing between two strategies for their aggregate planning as following:

Month 1 2 3 4 5 6 Total

Forecasting demand 10000 11000 15000 18000 25000 26000 105000

Cummulative
forecast demand

Supply rate

Cummulative
supply

Unused supply

Shortage of supply

Cost of unsed
supply

Cost of shortage

Number of
employee

Cost of moving
employees

Regular-time cost
of employees

Total cost

Strategy 1: level strategy

 Month 1 2 3 4 5 6 Total

Forecasting demand 10000 11000 15000 18000 25000 26000 105000

Cummulative
forecast demand

Supply rate

Cummulative
supply

Unused supply

Shortage of supply

Cost of unsed
supply

Cost of shortage

Number of
employee

Cost of moving
employees

Regular-time cost
of employees

Total cost

Strategy 2: Chase strategy

Finish aggregate planning for the company. Which strategy is the best for company? Explain
for your suggestions.