Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
broke). A super event disrupts all suppliers simultaneously (e.g.,
a natural catastrophe).
chain; (2) order batching, which can be remedied through channel
166 SUPPLEMENT 11 SUPPLY-CHAIN MANAGEMENT ANLYTICS
S11.2 S = 0.03; U = 0.05; L = $400,000; C = $15,000
Using Equation (S11-1), the probability of a total disruption using one, two, or three suppliers equals:
+ − = + = + =
+ − = + = + =
1
2
(1) : 0.03 (1 0.03)0.05 0.03 (0.97)(0.05) .03 0.0485 .0785
(2) : 0.03 (1 0.03)0.05 0.03 (0.97)(0.0025) .03 0.002425 .032425
P
P
From the decision tree, we can see that the best choice is to use one supplier.
168 SUPPLEMENT 11 SUPPLY-CHAIN MANAGEMENT ANLYTICS
2222 2
222
(600 250) (0 250) (0 250) (0 250) (1,400 250)
(0 250) (0 250) (0 250)
(8 1)
− + − + − + − + −
+ − + − + −
−
122,500 62,500 62,500 62,500 1,322,500 62,500
62,500 62,500
++++ +
++
=
S11.10
Company
Donna Inc.
Kay Corp.
1
2
2
2
2
4
2
3
5 .2 = 1.0
6 .2 = 1.2
Total:
8.2
9.8 higher rating
S11.11
Company
Donna Inc.
Kay Corp.
2
2
Kay Corp. maintains a higher rating.
S11.12 This exercise can be used to illustrate the difficulty of
selecting criteria and of “objectively” ranking similar companies
and products. This is an especially good exercise when the univer-
sity ranked highest by the student is not the one he or she actually
attends. You can discuss the impact of “hidden,” or unknown,
S11.12 (continued)
Days in year = (.35 $250,000)/365 = $239.73.
Criteria
University 1
4 3 2 1
University 2
4 3 2 1
University 3
4 3 2 1
University 4
4 3 2 1
University 5
4 3 2 1
Academics
Reputation
Breadth of offerings
Depth of offerings
Variety of offerings
Graduation rate
Length of program
Laboratory facilities
Teaching facilities
% honor graduates
Teaching methodologies
Use of IT in teaching
Financial
Tuition
Room & board
Books, supplies, etc.
Additional expenses
Location
Desirability
Local transportation
Weather
Size
Undergraduate class
Total enrollment
Campus
Size
Adequacy
170 SUPPLEMENT 11 SUPPLY-CHAIN MANAGEMENT ANLYTICS
6 27
(0.3)( ) $20 (.30)($20)
365 365
1.004932 20.443836
$20.34
+ +
xx
x
x
ADDITIONAL HOMEWORK PROBLEM
Here is the solution to an additional homework problem found on
166 SUPPLEMENT 11 SUPPLY-CHAIN MANAGEMENT ANLYTICS
S11.2 S = 0.03; U = 0.05; L = $400,000; C = $15,000
Using Equation (S11-1), the probability of a total disruption using one, two, or three suppliers equals:
+ − = + = + =
+ − = + = + =
1
2
(1) : 0.03 (1 0.03)0.05 0.03 (0.97)(0.05) .03 0.0485 .0785
(2) : 0.03 (1 0.03)0.05 0.03 (0.97)(0.0025) .03 0.002425 .032425
P
P
From the decision tree, we can see that the best choice is to use one supplier.
168 SUPPLEMENT 11 SUPPLY-CHAIN MANAGEMENT ANLYTICS
2222 2
222
(600 250) (0 250) (0 250) (0 250) (1,400 250)
(0 250) (0 250) (0 250)
(8 1)
− + − + − + − + −
+ − + − + −
−
122,500 62,500 62,500 62,500 1,322,500 62,500
62,500 62,500
++++ +
++
=
S11.10
Company
Donna Inc.
Kay Corp.
1
2
2
2
2
4
2
3
5 .2 = 1.0
6 .2 = 1.2
Total:
8.2
9.8 higher rating
S11.11
Company
Donna Inc.
Kay Corp.
2
2
Kay Corp. maintains a higher rating.
S11.12 This exercise can be used to illustrate the difficulty of
selecting criteria and of “objectively” ranking similar companies
and products. This is an especially good exercise when the univer-
sity ranked highest by the student is not the one he or she actually
attends. You can discuss the impact of “hidden,” or unknown,
S11.12 (continued)
Days in year = (.35 $250,000)/365 = $239.73.
Criteria
University 1
4 3 2 1
University 2
4 3 2 1
University 3
4 3 2 1
University 4
4 3 2 1
University 5
4 3 2 1
Academics
Reputation
Breadth of offerings
Depth of offerings
Variety of offerings
Graduation rate
Length of program
Laboratory facilities
Teaching facilities
% honor graduates
Teaching methodologies
Use of IT in teaching
Financial
Tuition
Room & board
Books, supplies, etc.
Additional expenses
Location
Desirability
Local transportation
Weather
Size
Undergraduate class
Total enrollment
Campus
Size
Adequacy
170 SUPPLEMENT 11 SUPPLY-CHAIN MANAGEMENT ANLYTICS
6 27
(0.3)( ) $20 (.30)($20)
365 365
1.004932 20.443836
$20.34
+ +
xx
x
x
ADDITIONAL HOMEWORK PROBLEM
Here is the solution to an additional homework problem found on
