BU395 - ExamAID Slides Winter 2011 at Jan 31 2am

BU395 - ExamAID Slides Winter 2011 at Jan 31 2am - BU395...

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Unformatted text preview: BU395 Operations Management II Midterm Review Tutor: Tim Savini Tutor: Tim Savini Provided by: Laurier SOS Provided by: Laurier SOS 1 Agenda Introduction Cover exam content Integrated examples Solve examples from take home package If time permits Feel free to ask questions at any time 2 Review: Supply Chain Management 3 Supply Chain Introduction Supply chain describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together 4 Raw Materials Manufacturing Distributing Retailing Customers Supply Chain Management Supply chain management is a total system approach to managing the flow from suppliers to end consumers Reasons for SCM: Information revolution Increased competition & globalization Improving relationships with other supply chain members 5 Supply Chain Uncertainty Goal of supply chain management is to respond to uncertain customer demand without creating costly excess inventory Uncertainty can cause Late orders Incomplete orders 6 Bullwhip Effect Retailer sees product is selling well so they double their order Wholesaler sees large order so they double their order anufacturer sees large order so they double Manufacturer sees large order so they double production 7 Supply Chain Variability Bull-whip is classic example Another example is snowball effect A small breakdown in a manufacturing plant in Malaysia causes a 1 day delay Which causes the product to miss the scheduled shipping boat in Hong Kong causing a 3 day delay Which causes the product to show up on the weekend when the offices are closed, totaling a 5 day delay 8 Information Technology in SC Improves coordination along the supply chain as information travels more quickly and with higher accuracy Allows supply chain to be more responsive to demand Ex Some companies are so well integrated that retailers dont need to place orders and manufacturers see how well products are selling instantly and adjust production accordingly. 9 Review: Win-Win Contracts 10 Supply Chain Optimization 4 cases Sequential (Individual) Optimization Buyback Revenue Sharing Global Optimization 11 Simple Example Suppose an entrepreneur wanted to sell flags during the 2012 Olympic Games Flags would sell for $25 and cost $10 BUT any unsold flags at the end of the games n only be sold for $5 can only be sold for $5 How many flags should be ordered to maximize profits? 60 70 80 90 100 0.05 0.25 0.4 0.25 0.05 Demand 12 Solving To solve: Calculate payoff table based on every level of order size OR Use short cut method by identifying the cost of over estimating demand and under estimating demand 13 Relevant Costs Revenue: $25 COGS: $10 Salvage Value: $5 Cost of over ordering: $10-5 = $5 Cost of under ordering (lost profit): $25-10 = $15 14 Payoff Table Purchased: Demand Expected Value: 60 70...
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This note was uploaded on 10/15/2011 for the course BUSINESS bu393 taught by Professor - during the Spring '11 term at Wilfred Laurier University .

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BU395 - ExamAID Slides Winter 2011 at Jan 31 2am - BU395...

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