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A company produces and distributes its products in the continental United States, mostly to customers located in metropolitan areas. The company conducts an ABC analysis to classify items, and determines that A and B items have variable demand, while C items have relatively stable demand. The logistics group wants to use this information to minimize transportation costs. Which of the following is the BEST combination of modes for the firm to use in order to minimize costs?
See the explanation below.
To minimize transportation costs, the logistics group should use motor carriage for A and B items, intermodal rail for C items, and air freight only as needed. Motor carriage provides flexibility and is cost-effective for variable demand items (A and B items), especially when these items need timely deliveries in metropolitan areas. Intermodal rail is ideal for C items with stable demand as it is more cost-effective for transporting large volumes over long distances. Air freight, being the most expensive, should be reserved for urgent needs only. This combination leverages the strengths of each transportation mode to optimize cost and efficiency. Reference:
* Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2016). Supply Chain Manage-ment: A Logistics Perspective. Cengage Learning.
* Murphy, P. R., & Knemeyer, A. M. (2018). Contemporary Logistics. Pearson.
A supplier of aircraft seating receives a forecast from a major aircraft manufacturer. The forecast information is considered confidential, and thus the supplier must sign a Non-Disclosure Agreement (NDA). Given this situation, which of the following is MOST likely to be protected by the NDA?
See the explanation below.
The number of aircraft anticipated to be built is most likely to be protected by the Non-Disclosure Agreement (NDA). This information is sensitive as it can reveal the scale of the project, future business plans, and production capabilities, which competitors could exploit if they gained access. The NDA ensures that the supplier keeps this information confidential to protect the interests of the aircraft manufacturer. Other details like the time frame, start date, and the name of the end customer are also important but the quantity of aircraft directly ties to the company's strategic plans and capacity. Reference:
* Bagley, C. E., & Dauchy, C. E. (2018). The Entrepreneur's Guide to Law and Strategy. Cengage Learning.
* Seidel, G. (2014). Negotiating Business Transactions: An Extended Simulation Course. Aspen Publishers.
XYZ, Inc. has experienced a significant increase in the number of expedited orders with a key supplier over the last few months. In this situation, XYZ should
See the explanation below.
When experiencing a significant increase in expedited orders, the best course of action for XYZ, Inc. is to determine the reasons for these orders, identify the root cause, and take corrective action. This approach helps in addressing the underlying issues, whether they are related to demand fore-casting inaccuracies, production delays, or supply chain inefficiencies. By understanding and cor-recting the root cause, XYZ can prevent future expedited orders, reduce costs, and improve overall supply chain performance. Reference:
* Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Op-eration. Pearson.
* Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.
A company is expanding its production capability. A project manager is assigned to bring a team of stakeholders together to conduct an analysis of the situation and develop a plan. During the analysis, the project manager gains an understanding of what resources stakeholders are willing to commit, the stakeholders' expectations, and what the stakeholders have to gain from the project. This analysis is MOST likely to identify which of the following?
See the explanation below.
When a project manager brings stakeholders together to conduct an analysis, understanding the resources, expectations, and gains from the project is likely to identify potential conflicts that could impede the project's success. Identifying these conflicts early allows the project manager to address and mitigate them, ensuring smoother project execution. This is crucial for aligning stakeholder interests and maintaining focus on project goals. Other aspects like additional re-sources, time frames, and roles and responsibilities are important but typically come after under-standing and resolving any potential conflicts. Reference:
* Project Management Institute. (2017). A Guide to the Project Management Body of Knowledge (PMBOK Guide). PMI.
* Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. Wiley.
XYZ, Inc. is implementing a new automated system in its distribution center. The supply manager is developing measures to evaluate the success of the automated system pilot. Which of the following is the BEST metric to measure overall success of the pilot7
See the explanation below.
When evaluating the success of a new automated system pilot in a distribution center, it is essential to choose metrics that directly measure the efficiency and effectiveness of the system.
Impact on labor hours is the best metric to measure the overall success of the pilot. Automation aims to streamline operations, reduce manual labor, and increase productivity. By tracking the impact on labor hours, the supply manager can quantify the reduction in manual work, which directly correlates with the efficiency gains from the automated system.
Other metrics mentioned, such as:
Average cost of orders: While important, this metric may be influenced by several factors beyond the automation system.
Competitiveness of pricing: This is more relevant to market strategy and less to internal operational changes.
Adherence to forecasts: Useful but does not directly reflect the operational improvements from the automation.
Measuring labor hours provides a clear, tangible indication of the automation system's impact on operational efficiency, making it the most relevant and direct measure of the pilot's success.
'Warehouse & Distribution Science' by John Bartholdi and Steven Hackman
'Automation in Warehouse Development: Impact on Workforce and Productivity' by the International Journal of Production Research
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