The objectives of supply chain management are to meet the requirements of end
customers by supplying appropriate products and services when they are needed, at a
competitive cost. Doing this requires the supply chain to achieve appropriate levels of the
five operations performance objectives:
Select FOUR of the above performance objectives. Taking each choice separately, define
the choice in a supply chain context and explain how decisions relating to the choice
affect supply chain operations performance.
Yield management can be very effective when balancing supply with demand especially
for service organisations.
(a) Discuss the operational environment that makes yield management effective. Illustrate
your answer with examples. (7 marks)
(b) Discuss the process flow that is required in yield management. (7 marks)
(c) Discuss two complications that provide a challenge (or an opportunity) to the supply
chain function when yield management is implemented. (6 marks)
In class we discussed Case Study 1 entitled “Three crises for Toyota”. What lean thinking
ideas are demonstrated in the three crises for Toyota
(a) Eli Goldratt (using the theory of constraints) avoided much of the complexity often
associated with scheduling. Discuss how he proposed to avoid this complexity. (6 marks)
(b) Describe the problems that supply chain collaboration endeavours to minimise. (8
(c) Discuss how supply chain collaboration should improve the operation of the supply
chain. (6 marks)
Question 5. 20 marks
A food processing plant is about to commission a new packing line. The label on each
container says that the net weight is 375 grams and customers are dissatisfied if the
weight is below this mark. The company monitors the fill weight to ensure that a
satisfactory number of containers are equal to or above this measurement.
The process was monitored during extensive testing and regular samples taken from the
packing line gave a standard deviation based on a normal distribution of 0.9 grams.
(a) What is the difference between a process capability ratio Cp and a process
capability index Cpk (4 marks)
(b) Production management has decided to set the mean weight level at 379 grams.
Calculate the process capability ratio Cp to 4 decimal places (4 dp) and the process
capability index Cpk to 4 decimal places (4 dp) when the process is operating at target
value (379 grams). (6 marks)
(c) During the Winter months, the process mean drifted to 378 grams. This shift in the
process mean occurred without operator or managemen
t intervention. Calculate the
process capability ratio Cp to 4 decimal places (4 dp) and the process capability index
Cpk to 4 decimal places (4 dp) when the process was operating at the Winter observed
value (378 grams). (6 marks)
(d) What value for sigma must be obtained to achieve a 4 sigma process capability when
the process is operating at the Winter observed value (378 grams)? (4 marks)
Womack describes the perfect process as a process in which every step is valuable,
capable, available, adequate and flexible. Discuss
Discuss the bullwhip effect (or demand amplification). In particular, discuss how the
effect happens and what can be done to minimise any adverse effects.