OM2, Slots V-VI, 2013-14End-Term ExamMaximum time allotted: 2:00
HrsMaximum marks: 50 This exam is open book, open notes. In case
you need to make any assumptions, please state them clearly on the
answer-sheet. The assumptions will be taken into account only if
they are considered reasonable by the instructors. Please write
your final answers in blue or black ink. Any work done on rough
sheets will not be considered. Please write legibly. A solution
that is not legible will fail to fetch any mark. A final answer
without any steps justifying how the answer is arrived at will fail
to fetch any mark. Q.1 [10 Marks] Pick the correct answer(s)i. [1
Mark] On Apple iTunes store songs are sold at 99 cents per
download. Apple pays 65 cents on average to the respective music
label company for each download. The terms of this agreement
between Apple and the music label company are closest to: a)
Wholesale price contractb) Quantity flexibility contractc) Revenue
sharing contractd) Buyback contracts
ii. [2 Marks] A retailer operates a distribution center (DC)
that serves 250 retail stores. The retail stores sell individual
units but shipments from the DC to the stores are done in case
quantities (i.e., each store orders from the DC an integer number
of cases). Orders submitted to suppliers for delivery to the DC are
done in pallet quantities. Each pallet holds multiple cases, with
the actual number of cases depending on the size and weight of the
product. Which of the following statements is true?a) The bullwhip
effect is not likely to be present in this supply chain because the
retailer is consistent in the order multiples used (i.e., always
ordering in case or pallet quantities). b) The bullwhip effect is
not likely to be present in this supply chain because the same firm
operates both the DC and the retail stores, and can therefore
better coordinate ordering. c) The bullwhip effect is likely to be
present in this supply chain because there is evidence of order
batching effects. d) The bullwhip effect is likely to be present in
this supply chain because there is evidence of forward buying. e)
It is not possible to determine with the information given whether
the bullwhip effect will be present in this supply chain or
not.
iii. [2 Marks] By selecting the parameters of a revenue sharing
contract appropriately, it is possible to:A. Achieve the maximum
possible profit in the supply chain by coordinating actions of the
supplier and the retailer. B. Have the suppliers profit equal to
twice the retailers profit. C. Induce the retailer to order more
than he would under any wholesale price contract. Which of the
above is/are true?(a) A only (b) B only (c) C only (d) A and B(e) B
and C(f) A and C(g) A, B and C(h) None of the above
iv. [5 Marks] A supplier sells a seasonal product with uncertain
demand to a retailer at a wholesale price of Rs. 40 each. It costs
the supplier Rs. 35 to manufacture and supply each unit. The
retailer sells the same at Rs. 45 each. The supplier does not
accept returns and, as a result, the retailer salvages left over
inventory at the end of the season for Rs. 30 each. The retailer
orders a quantity so as to maximize her expected profit. a) The
supply chain is coordinatedb) The supply chain is not coordinated,
but is possible to coordinate by having the supplier take back the
unsold products for Rs. 37.5 each if the retailer incurs negligible
transportation cost to return each unit.c) The supply chain is not
coordinated, but is possible to coordinate by having the supplier
take back the unsold products for Rs. 36 each if the retailer
incurs negligible transportation cost to return each unit.d) The
supply chain is not coordinated, but is possible to coordinate by
having the supplier sell each unit at a wholesale price of Rs. 28
in return for a 40% (for the supplier) share in the sales revenue
(not on the salvaged products).
Q2. [8 Marks] SparesRUs, an autopart retailer, must decide on
the order size for a 20-year old model of brakes. The manufacturer
plans to discontinue production of these brakes after this last
production run. SparesRUs has forecast remaining demand for the
brakes to be normally distributed, with a mean of 150 and a
standard deviation of 40. The brakes have a retail price of $200.
Any unsold brakes will be useless, fetching practically zero
revenue. The manufacturer plans to sell each brake for $50 if the
order is for less than 200 brakes; and for $45 if the order is for
at least 200 brakes. How many brakes should SparesRUs order?Q3. [9
Marks] Upon graduating from IIM Ahmedabad, one of your seniors has
been struggling in his career as a freelance consultant. One fine
day, he wins a consultancy project worth Rs. 1 million. The project
can be broken into 5 different, completely independent, smaller
assignments. However, the payment is to be made only on successful
completion of the entire project. Overwhelmed by the magnitude of
the project, he has approached you to help him. Your senior (lets
now call him your boss) has decided to prepare the basic guideline
for each of the 5 assignments, following which you can work on the
details. Both of you have together come up with the following
estimate of the time required to complete the different
assignments. Since the payment is to be made only on the successful
completion of the entire project, the longer you take to deliver,
the more interest you have to forgo on Rs. 1 million that you can
earn by investing it in the bank. To minimize the loss of interest
income:i. [3 Marks] What is the order in which your boss should
work on the 5 assignments?ii. [3 Marks] What is the order in which
you should work on the 5 assignments?iii. [3 Marks] When would you
be able to complete the project if you were to minimize the total
interest income that you would have to forgo?
Q5. [10 Marks] The Gujarat Board has given FII club at IIMA a
project to evaluate the relative efficiency of Ahmedabads 4
elementary schools. The 3 outputs of the schools are defined to be
as given below:
The relevant information for the 4 schools is given in the Table
below.
For this, one of your group mates has provided you with the
following 4 Linear Programs (LPs), namely A, B, C and D:
A:
B:
C:
D:
The sensitivity reports for the 4 LPs are provided below.
Determine:i. [4 Marks] Which, if any, schools are relatively
inefficient. Why?ii. [2 Marks] For any relatively inefficient
schools, determine the relative inefficiencies. How?iii. [2 Marks]
For any relatively inefficient schools, which schools are in the
peer group, i.e., which schools should these relatively inefficient
schools learn from to become efficient? Why?iv. [2 Marks] For the
relatively inefficient schools, what is the maximum fraction to
which their input usages be decreased, without any degradation in
their outputs, to make them relatively efficient? Why?
A:
B:
C:
D:
Q6. [6 Marks] An assembly line requires two components: gadjits
and widjits. Gadjits are produced by workcenter 1 and widjits are
produced by workcenter 2. Each unit of the end item, called a
jit-together, requires 3 gadjits and 2 widjits. The daily
production quota on the assembly line is 800 jit-togethers. The
container for gadjits holds 80 units. Management allows a buffer
stock, which is 9% of the daily demand, to accommodate any
unexpected demand occurrences for gadjits. The average waiting time
for a container of gadjits at workcenter 1 is 0.09 day, and 0.06
day is needed to produce a container. The container for widjits
holds 50 units, and the management allows a buffer stock, which is
8% of the daily demand, to accommodate any unexpected demand
occurrences for gadjits. The average waiting time for a container
of widjits at workcenter 2 is 0.14 day, and 0.20 day is needed to
produce a container.a. [3 Marks] Using a Kanban-pull system, how
many containers are needed for gadjits?b. [3 Marks] Using a
Kanban-pull system, how many containers are needed for widjits?Q7.
[8 Marks] You are the owner of Hotspices.com, an online retailer of
exotic and hard-to-find spices. Every week you order saffron, a
spice generally worth more than gold by weight, from an overseas
supplier with a shipping lead time of four weeks. Average quarterly
demand for saffron is normally distributed with a mean of 415
ounces and a standard deviation of 154 ounces. The holding cost per
ounce of saffron per week is $0.75. You estimate that your
back-order penalty cost is $50 per ounce. Assume there are 4.33
weeks per month.a.[3 Marks] If you wish to minimize inventory
holding costs while maintaining a 99.25 percent in-stock
probability, then what should your order-up-to-level be?b. [4
Marks] If you wish to minimize holding and back-order penalty
costs, then what should your order-up-to-level be?
Q1
Q2Assignment No.Time for Guideline preparation by your bossTime
for detailed work by you11528231.5743654.52.5
1-3-4-5-2
BossYou0.5111.53122.5343.544.555.5656.5377.588.599.51010.521111.51212.51313.541414.51515.51616.51717.51818.51919.552020.52121.522222.52323.52424.525
Q4_DEASchool InputsOutputs123123Output 1=Average reading
score11340.05976Output 2=Average mathematics
score21450.051087Output 3=Average self-esteem
score31160.061178Input 1=Average years of education of students'
mothers41580.08999Input 2=Number of parents' visits to school per
childInput 3=Teacher to student ratio
LP1u1u2u3v1v2v300.1428571429000.2509760001s.t.976-13-4-0.050
