What are the four foundation elements of supply chain management? Describe some activities within each element.
> Why do organizations use supplier certification? What are its benefits?
> The owner of the Chocolate Outlet Store wants to forecast chocolate demand. Demand for the preceding four years is shown in the following table: 1 ...................................................................... 68,800 2 .......... .............
> What is the difference between and MRP system and an ERP system?
> Are environmental concerns influencing purchasing decisions? What are the benefits of ISO 14000 certification?
> When should a firm outsource instead of making the items in-house?
> Define the term supply chain management in your own words, and list its most important activities.
> Given the following production plan, use a (a) chase production strategy, and (b) level production strategy to compute the monthly production, ending inventory/ (backlog), and workforce levels. A worker is capable of producing 100 units per month. Assume
> Explain backward vertical integration. What are the advantages of outsourcing compared to backward vertical integration?
> What does the term, “third-tier supplier” mean? What about “third-tier customer”? What about the “focal firm”? Provide examples.
> How is lean thinking associated with supply chain management?
> Why should an organization invest in supplier development programs? What are the challenges of supplier development activities?
> The bills of materials for a finished product E, inventory status, and other relevant information are given below. Compute the planned order releases and projected on hand inventory balances for parts E, F, and M. A B F 2 required 3 required 2 requir
> Why are small value purchase orders problematic? How can purchasing more effectively deal with this problem?
> What is “segmenting customers” and why is it perhaps the most important activity in CRM?
> Crop-Quick Inc. replenishes its three distribution centers in Boston, Denver and Houston from its Las Vegas central supply warehouse. The distribution schedule for one of its products for the next six weeks is shown below. Use proper distribution require
> Define the term Customer Relationship Management. What has caused this definition has changed over the past 20 years?
> Could self-service websites be used in place of call centers?
> Do you think call center outsourcing negatively affects customer service? Explain.
> Are call centers good for CRM?
> Describe the types of customer service that come before, during and after the sale. Why are they important to CRM?
> What person or people at Toyota is (are) most responsible for the development of the JIT concept?
> How do various social media impact an organization’s CRM methods? Should firms use social media for attracting new customers?
> How can firms help to assure the privacy and security of their customers’ information and data?
> What sort of problems generally occur with a firm’s existing CRM applications?
> How do you think CRM performance should be measured? Suggest several performance measures.
> What is the most common mistake made, when designing and implementing a CRM program?
> Describe the purpose of a material requisition, a purchase order, a request for quotation, and a request for proposal. Does the material requisition serve the same purpose as the purchase order?
> When would you want to use value-of-service pricing instead of cost-of-service pricing?
> What are some intermodal transportation alternatives?
> List the legal forms and modes of transportation. Which mode is the least expensive? Which mode carries the most freight? Which mode is growing the fastest? Shrinking the fastest?
> Define risk pooling and the advantages and disadvantages of centralized warehousing. What assumption does risk pooling make?
> Why should an organization be concerned with supplier relationships?
> Describe three different types of warehouses and the advantages of each.
> What are the most common logistics management software applications and why are they beneficial to users?
> What are the impacts of logistics on environmental sustainability? How can these be minimized?
> Can 3PLs be effective supply chain partners? Why?
> What are 3PLs and why are they used? Why is their use growing so rapidly? What are 4PLs and why are they used?
> Why is logistics so important for successful supply chain management?
> How is lean production associated with JIT?
> What does the bullwhip effect refer to and what causes it? How then, would you try to reduce the bullwhip effect?
> Explain why lean production and Six Sigma are so important to successful supply chain management.
> What are the two types of process variation, and which one does statistical process control seek to eliminate? What can be done with the other one?
> What are the two most widely used ISO standards, and why are they so popular?
> Describe Deming’s Theory of Management and how it can be used to improve quality?
> Describe Six Sigma’s origins and the main parties involved. Why do you think the concept is called “Six Sigma”?
> Discuss the linkage between lean systems and environmental sustainability.
> What is kaizen, and why is it so important for successful lean production?
> What are kanbans and why are they used in lean production systems?
> What are manufacturing cells, and why are they important in lean production?
> How can reverse logistics have a positive impact on the environment? On profits? On customer service? On repeat purchases?
> Why should lean layouts be visual?
> What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers? How do we overcome the disadvantages?
> Given the following inventory information, construct an (a) ABC analysis by annual dollar usage, (b) ABC analysis by current inventory value, and (c) an ABC inventory matrix. Is the firm stocking the correct inventories? ITEM NUMBER UNIT COST ($) AN
> Given the following information for an important purchased part, compute the (a) EOQ, (b) total purchase cost, (c) annual holding cost, (d) annual order cost, (e) annual total cost, (f) reorder point, (g) number of orders placed per year and (h) time bet
> Given the following information for an important purchased part, compute the (a) economic order quantity, (b) total purchase cost, (c) annual holding cost, (d) annual ordering cost, (e) annual total cost, (f) reorder point, (g) number of orders placed pe
> The weekly requirement of a part is 950 units. The order cost is $85 per order, the holding cost is $5 per unit per year and the part cost is $250 per unit. The firm operates fifty-two weeks per year. Compute the (a) EOQ, (b) annual holding cost, (c) ann
> Describe and provide examples of dependent and independent demand.
> Explain whether the continuous review or periodic review inventory system is likely to result in higher safety stock. Which is likely to require more time and effort to administer? Why?
> What is the purpose of the EOQ and the ROP? How can they be used together?
> What is the ABC inventory matrix, and how is it used to manage inventory?
> What is reverse logistics? How does it impact supply chain management?
> What is the profit-leverage effect of purchasing? What is the return on assets effect of purchasing?
> Describe the four basic types of inventory.
> Is a level production strategy suitable for a pure service industry, such as professional accounting and tax services or law firms? Can these firms inventory their outputs?
> Compare and contrast chase versus level production strategies. Which is more appropriate for an industry where highly skilled laborers are needed? Why?
> Describe the relationships among MRP, closed-loop MRP, MRP-II, and ERP.
> Describe aggregate production planning, master production planning, material requirements planning, and distribution requirements planning. How are these plans related?
> Describe long range, medium range, and short range planning in the context of the materials plan and capacity plan. How are they related?
> Explain best-of-breed and single integrator ERP implementations. What are the advantages and disadvantages of the best-of-breed implementation?
> Describe the limitations of a legacy MRP system.
> Why have so many firms rushed to implement ERP over the past ten years?
> How has NAFTA impacted trade between the U.S., Canada and Mexico? Is NAFTA good for domestic U.S. and Mexican producers?
> Ms. Winnie Lin’s company sells computers. Monthly sales for a six-month period are as follows: Jan ................................................................ 18,000 Feb ................................................................. 22,000 Mar ..
> Using the information in Table 8.9, verify that it is possible to derive the 8-quarter dollar interest swap rate from the 8-quarter euro interest swap rate by using equation (8.13). Equation (8.13). TABLE 8.9 Quarter 2 3 4 5 7 8 20.5 Oil forward pr
> Suppose you observe the following month-end stock prices for stocks A and B: For each stock: a. Compute the mean monthly continuously compounded return. What is the annual return? b. Compute the mean monthly standard deviation. What is the annual standar
> The firm is considering an investment project costing $1. What is the amount by which the project’s value must exceed its cost in order for shareholders to be willing to pay for it? Repeat for project values of $10 and $25.
> Explain how to synthetically create the equity-linked CD in Section 15.3 by using a forward contract on the S&P index and a put option instead of a call option. (Hint: Use put-call parity. Remember that the S&P index pays dividends.) B(0, T,
> Let S = $40, K = $45, σ = 0.30, r = 0.08, δ = 0, and T = {0.25, 0.5, 1, 2, 3, 4, 5, 100}. a. Compute the prices of knock-out calls with a barrier of $38. b. Compute the ratio of the knock-out call prices to the prices of standard calls. Explain the patte
> Suppose you buy a 950-strike S&R call, sell a 1000-strike S&R call, sell a 950-strike S&R put, and buy a 1000-strike S&R put. a. Verify that there is no S&R price risk in this transaction. b. What is the initial cost of the position? c. What is the value
> Suppose S = $100, K = $95, σ = 30%, r = 0.08, δ = 0.03, and T = 0.75. a. Compute the Black-Scholes price of a call. b. Compute the Black-Scholes price of a call for which S = $100 × e−0.03×0.75, K = $95 × e−0.08×0.75, σ = 0.3, T = 0.75, δ = 0, r = 0. How
> Use Itˆo’s Lemma to evaluate dS−1. For the following four problems, use Itˆo’s Lemma to determine the process followed by the specified equation, assuming that S(t) follows (a) a
> Let S = $100, K = $100, σ = 30%, r = 0.08, t = 1, and δ = 0. Let n = 10. Suppose the stock has an expected return of 15%. a. What is the expected return on a European call option? A European put option? b. What happens to the expected return if you incre
> Repeat the option price calculation in the previous question for stock prices of $80, $90, $110, $120, and $130, keeping everything else fixed. What happens to the initial option ∆ as the stock price increases?
> Suppose the dollar-denominated interest rate is 5%, the yen-denominated interest rate is 1% (both rates are continuously compounded), the spot exchange rate is 0.009 $/¥, and the price of a dollar-denominated European call to buy one yen with 1 year to e
> Using the information about zero-coupon bond prices and oil forward prices in Table 8.9, construct the set of swap prices for oil for 1 through 8 quarters. TABLE 8.9 Quarter 2 3 4 5 7 8 Pil forward price 21 21.1 20.8 20.5 20.2 20 19.9 19.8 Gas swap
> Consider the same facts as the previous problem, only now consider hedging with the 3-month Eurodollar futures. Suppose the Eurodollar futures contract that matures 60 days from today has a price on day 0 of 94. a. What issues arise in using the 3-month
> Suppose you are selecting a futures contract with which to hedge a portfolio. You have a choice of six contracts, each of which has the same variability, but with correlations of −0.95, −0.75, −0.50, 0, 0.25, and 0.85. Rank the futures contracts with res
> Using the information in Table 7.1, a. Compute the implied forward rate from time 1 to time 3. b. Compute the implied forward price of a par 2-year coupon bond that will be issued at time 1. TABLE 7.1 Five ways to present equivalent information abou
> The S&R index spot price is 1100, the risk-free rate is 5%, and the dividend yield on the index is 0. a. Suppose you observe a 6-month forward price of 1135. What arbitrage would you undertake? b. Suppose you observe a 6-month forward price of 1115. What
> Draw profit diagrams for the following positions: a. 1050-strike S&R straddle. b. Written 950-strike S&R straddle. c. Simultaneous purchase of a 1050-strike straddle and sale of a 950-strike S&R straddle.
> If Telco does nothing to manage copper price risk, what is its profit 1 year from now, per pound of copper that it buys? If it hedges the price of wire by buying copper forward, what is its estimated profit 1 year from now? Construct graphs illustrating
> Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1-year effective annual interest rate is 10%. a. Graph the payoff and profit diagrams for a forward contract on XYZ stock wit
> Suppose you short-sell 300 shares of XYZ stock at $30.19 with a commission charge of 0.5%. Supposing you pay commission charges for purchasing the security to cover the short-sale, how much profit have you made if you close the short-sale at a price of $
> Suppose that there is a 3%per year chance that the firm’s asset value can jump to zero. Assume that the firm issues 5-year zero-coupon debt with a promised payment of $110. Using the Merton jump model, compute the debt price and yield, and compare to the
> There are four debt issues with different priorities, each promising $30 at maturity. a. Compute the yield on each debt issue assuming that all four mature in 1 year, 2 years, 5 years, or 10 years. b. Assuming that each debt issue matures in 5 years, wha
> Using the delta-approximation method and assuming a $10m investment in stock A, compute the 95% and 99% 1-, 10-, and 20-day VaRs for a position consisting of stock A plus one 105-strike put option for each share. Use the same assumptions as in Example 26
> Consider two zero-coupon bonds with 2 years and 10 years to maturity. Let a =0.2, b = 0.1, r = 0.05, σVasicek = 10%, and σCIR = 44.721%. The interest rate risk premium is zero in each case. We will consider a position consisting of one $100 par value 2-y
> Use the following inputs to compute the price of a European call option: S = $100, K = $50, r = 0.06, σ = 0.30, T = 0.01, δ = 0. a. Verify that the Black-Scholes price is $50.0299. b. Verify that the vega for this option is almost zero. Why is this so? c
> Suppose the current exchange rate between Germany and Japan is 0.02 =C/¥. The euro-denominated annual continuously compounded risk-free rate is 4% and the yen-denominated annual continuously compounded risk-free rate is 1%. What are the 6-month euro/yen
> In this problem we will use Monte Carlo to simulate the behavior of the martingale St/Pt, with Pt as numeraire. Let x0 = S0/P0(0, T ). Simulate the process Let h be approximately 1 day. a. Evaluate b. Compute the mean and standard deviation of the di
