chopra_scm5_tif_ch06.doc

 Supply Chain Management, 5e (Chopra/Meindl) Chapter 6 Designing Global Supply Chain Networks

6.1 True/False Questions 1) Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and sie of plants to build, the number of truc!s to purchase or lease, and "hether to build or o r lease "arehouse space, cannot be altered in the short term. #ns"er$ T%&' Diff$ ( Topic$ 6.1 The mpact of *lobaliation *lobaliation on +upply hain -et"or!s earning utcome$ ompare common approaches to supply chain design () Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and sie of plants to build, the number of truc!s to purchase or lease, and "hether to build or o r lease "arehouse space, rarely remain in place for several years. #ns"er$ F#+' Diff$ ( Topic$ 6.1 The mpact of *lobaliation *lobaliation on +upply hain -et"or!s earning utcome$ ompare common approaches to supply chain design 0) ongterm contracts for both "arehousing and transportation re2uirements "ill be more effective if the demand and price of "arehousing do not change in the future or if the price of "arehousing goes up. #ns"er$ T%&' Diff$ 1 Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees Trees earning utcome$ ompare common approaches to supply chain design 4) The degree of demand and price uncertainty has a significant influence on the appropriate  portfolio of long and shortterm "arehousing space that a firm should carry. carry. #ns"er$ T%&' Diff$ 1 Topic$ 6.1 The mpact of *lobaliation *lobaliation on +upply hain -et"or!s earning utcome$ ompare common approaches to supply chain design 3) f price and demand vary over time in a global net"or!, fle5ible production capacity can be reconfigured to ma5imie profits in the ne" environment. #ns"er$ T%&' Diff$ ( Topic$ 6.1 The mpact of *lobaliation *lobaliation on +upply hain -et"or!s earning utcome$ ompare common approaches to supply chain design

61 opyright  (710 8earson 'ducation, nc. publishing as 8rentice 9all

6) # firm may choose to build a fle5ible global g lobal supply chain even in the presence of little demand or supply uncertainty if certainty e5ists in e5change rates or prices. #ns"er$ F#+' Diff$ ( Topic$ 6.1 The mpact of *lobaliation *lobaliation on +upply hain -et"or!s :) The present value of a stream of cash flo"s is "hat that stream is "orth in today;s dollars. #ns"er$ T%&' Diff$ 1 Topic$ 6.4 Discounted ash Flo"s "ill provide a supply chain "ith the highest financial return. #ns"er$ F#+' Diff$ ( Topic$ 6.4 Discounted ash Flo"s 1() n reality, reality, demand and prices are highly uncertain and are li!ely to fluctuate during the life of  any supply chain decision. #ns"er$ T%&' Diff$ ( Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees Trees earning utcome$ ompare common approaches to supply chain design 10) For a global supply chain, e5change rates and inflation are unli!ely to vary over time in different locations. #ns"er$ F#+' Diff$ 1 Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees Trees earning utcome$ ompare common approaches to supply chain design

6( opyright  (710 8earson 'ducation, nc. publishing as 8rentice 9all

14) The multiplicative binomial cannot ta!e on negative values and can be used for factors li!e demand, price, and e5change rates that cannot become negative. #ns"er$ T%&' Diff$ ( Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees earning utcome$ ompare common approaches to supply chain design 13) # logical ob?ection to both the multiplicative and additive binomial is the fact that the underlying factor ta!es on t"o values at the end of each period. #ns"er$ F#+' Diff$ 0 Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees earning utcome$ ompare common approaches to supply chain design 16) f uncertainty is ignored, a manager "ill al"ays sign longterm contracts because they are typically cheaper and avoid all fle5ible capacity because it is more e5pensive. #ns"er$ T%&' Diff$ ( Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees earning utcome$ ompare common approaches to supply chain design 1:) During net"or! design, managers need a methodology that allo"s them to estimate the certainty in their forecast of demand and price and then incorporate this certainty into the decisionma!ing process. #ns"er$ F#+' Diff$ 0 Topic$ 6.3 'valuating -et"or! Design Decisions &sing Decision Trees earning utcome$ ompare common approaches to supply chain design 1 Bnet present value) of a cash stream that is e2ual to E177 per period for 3 periods "ith a rate of return of 17 B.17) per period "ould be #) 0:=.7  E0677  BE0677/1.1)  BE0677/1.1()  E=