Week 1 - Introduction To Supply Chain Planning

Question 1

What is a supply network?

Answer 1

Is the set of relationships between a firm and its suppliers and customers

Question 2

What is a supply chain?

Answer 2

Is one of the series of linkages from suppliers to customers within the supply network

Question 3

What is the main difference between upstream and downstream supply chain?

Answer 3

• Upstream are the different suppliers and are the input side
• downstream are the different customers are in the output side

Question 4

Examples of upstream suppliers (3)

Answer 4

• Materials suppliers (Third tier supplier)
• Components suppliers (second tier supplier)
• Sub-assembly suppliers (first tier supplier)

Question 5

Examples of downstream suppliers (3)

Answer 5

• Wholesalers (first tier customer)
• Retailers (Second tier customer)
• End users (Third tier customer)

Question 6

What are the different parties involved in the supply chain? (6)

Answer 6

• Manufacturers
• Suppliers
• Transportation providers
• Warehouses
• Retailers
• Customers

Question 7

What are the different supply chain functions involved in fulfilling customer requests? (5)

Answer 7

• Operations
• Marketing
• Design
• Finance
• Distribution

Question 8

What is the supply chain management?

Answer 8

Is the management of the flow of materials and information through the supply network

Question 9

Supply chain flows example

Answer 9

Question 10

What is the objective of supply chains?

Answer 10

To maximise the difference between the value of the final product to the customer and the costs incurred by the entire supply chain in meeting customer requests

Question 11

Formula for supply chain surplus

Answer 11

Supply chain surplus = Customer value (price) - supply chain cost

Question 12

3 phases of supply chain

Answer 12

• Supply chain strategy/design
• Supply chain planning
• Supply chain operations

Question 13

What happens in the supply chain strategy/design phase? (2)

Answer 13

• Design the long term structure of the SC
• Strategic as it involves major resources and decisions

Question 14

What happens in the supply chain planning phase? (3)

Answer 14

• Focus on the medium term supply chain operations
• Operations are under the constraints of the design to maximise the supply chain surplus
• This stage attempts to take information such as demand forecasts and make decisions regarding which markets will be supplied from which locations

Question 15

What happens in the supply chain operations phase? (2)

Answer 15

• Operate supply chain over short term making decisions regarding individual customer orders
• Decisions regarding allocating inventory or production to indivisible orders and setting delivery schedules

Question 16

What 4 ways can supply chain problems be analysed?

Answer 16

• Timescale
• Processes
• Products
• People

Question 17

What is the role of processes in supply chain? (2)

Answer 17

• Manufacturing and services consist of processes broken down into activities
• The interdependence between connected processes and the variability in demand on processes and process activation can be analysed using tools such as simulation

Question 18

What is the role of products in supply chain? (2)

Answer 18

• Most plants make multiple products so to maximise profit it is useful to optimise the product mix
• LP can be used to determine product mix

Question 19

What is the role of people in supply chain? (2)

Answer 19

• Most plants have a workforce with a variety of skills with different availability (full-time, part-time, contracts)
• LP can be used to determine how we use the workforce

Question 20

What is the planning hierarchy?

Answer 20

Spans long-term strategic issues to short-term control issues

Question 21

What is the function at the strategy level of the planning and control hierarchy?

Answer 21

Is to establish a production environment capable of meeting overall goals

Question 22

What is the function at the tactical level in the planning and control hierarchy?

Answer 22

Is to generate a plan of action that will help the organisation prepare for upcoming demand

Question 23

What is the function at the control level in the planning and control hierarchy?

Answer 23

Is to control the real-time flow of material and people through the organisation

Question 24

What is a qualitative forecasting? (2)

Answer 24

• Uses the expertise of people to develop likely future scenarios
• An example is Delphi

Question 25

What is quantitative forecasting?

Answer 25

Methods are based on the assumption that the future can be predicted by using numerical measures of the past

Question 26

What are the two models of quantitative forecasting?

Answer 26

• Causal models • Time series model

Question 27

What are causal models?

Answer 27

Predict a future parameter such as product demand from other parameters such as interest rates

Question 28

What are time series models?

Answer 28

Predict future parameters such as product demand as a function of past values of that parameter such as historical product demand

Question 29

What is capacity planning?

Answer 29

Involves making sure we have adequate capacity to fill forecast demand generated from marketing information

Question 30

What decisions are made in capacity planning? (2)

Answer 30

• Decide how much and what kind of equipment to purchase and supporting facilities • Example decisions include: floorspace, power supplies, spare parts inventories

Question 31

What issues should be included with capacity planning? (3)

Answer 31

• Product lifetimes - how long will we make the product? • Make-or-buy - should we be making a component it outsourcing its manufacturers to a supplier • Pricing - we need to know revenue generated to make decisions about investments in equipment

Question 32

What is workforce planning? (2)

Answer 32

• Ensures that an organisation has an adequate workforce to meet demand • Important to determine how much and what kind of labour is required

Question 33

What issues should be considered with workforce planning? (3)

Answer 33

• Worker availability - this must take account of breaks, holidays, training etc • Workforce stability - it is not usually desirable to rapidly increase or decrease the workforce • Workforce flexibility - are they cross-trained

Question 34

What is aggregate Planning? (2)

Answer 34

• Consists primarily of determining how much of each product to produce for each period, subject to constraints on capacity • The planning horizon is generally a year or more which will need to be re run to represent the current situation

Question 35

What is tactical planning?

Answer 35

Use scheduling strategies to produce a feasible master production scheme

Question 36

What is demand management?

Answer 36

Customer orders cannot be replaced to the facility in the random order that they are received but they must be collected and grouped to maintain a fairly constant load on the factory

Question 37

Schedules in tactical planning

Answer 37

There’s a need to balance concern with the stability of the factory with the desire for dependable customer service and short competitive due date quotes

Question 38

What happens in the operations control function? (3)

Answer 38

• Will follow the schedule whenever possible but also makes adjustments where necessary • Adjustments may be needed due to incidences such as equipment breakdown • Adjustments may also be needed for jobs that are given special treatment

Question 39

3 basic choices in linear programming formulation

Answer 39

• Objective function • Decision variables • Constraints

Question 40

Objective functions in linear programming (2)

Answer 40

• Typically want to maximise profit or minimise cost • Is specified in terms of decision variables

Question 41

Decision variables in linear programming (3)

Answer 41

These are quantities under control such as: • Production quantities • Number of workers • Level of inventory

Question 42

Constraints in linear programming formulation

Answer 42

Are restrictions on choices of decision variables and occur due to limitations in demand and capacity

Question 43

How can linear programming provide sensitivity analysis regarding capacity and workforce constraints? (2)

Answer 43

• Can run a model without the constraint and a plan will be generated to produce less units/months of a product to achieve an increased profit • Allows decisions to be made as to whether it was binding or does capacity need adjusting

Question 44

What information can linear programming provide on analysing decisions? (5)

Answer 44

• What is the product mix that maximises net profit (supply chain surplus) • Where the capacity bottleneck for a particular product mix • How many days we should operate to fulfil a contract • What mix of workers should be hire to minimise labour cost? • What floorspace in a warehouse should be allocated to each product to maximise profit