SOLVED

Section 1  Techniques for Evaluating Supply Chains 1) Unfortunately, not many supply chain metrics exist that can be effectively used to evaluate performance within a company and for its supply chain partners. 2) The Great East Japan Earthquake of 2011 was centered off of the Pacific coast of which region of Japan? A) Kanto B) Chubu C) Tohoku D) Kansai E) Chugoku 3) Which of the following statements is TRUE regarding the 2011 Tohoku earthquake and tsunami? A) It devastated eastern sections of Japan. B) Some manufacturers around the globe had been relying exclusively on suppliers located in the affected zones. C) Japanese-built vehicle outputs for Toyota and Honda were down more than 60% in the month following the disaster. D) Manufacturers in several industries worldwide took 6 months or longer before they saw their supply chains working normally again. E) All of the above are true. Section 2  Evaluating Disaster Risk in the Supply Chain 1) Firms often use multiple suppliers for important components to mitigate the risks of total supply disruption. 2) In the disaster risk model, as the probability of a super-event (S) increases, the advantage of utilizing multiple suppliers increases. 3) What technique does the text use to determine the best number of suppliers to manage disaster risk? A) linear programming B) factor weighting technique C) transportation model D) decision tree E) simulation 4) Which of the following is NOT an element of the disaster risk decision tree model? A) the buyer’s financial loss incurred in a supply cycle if supplier i were disrupted B) the marginal cost of managing a supplier C) the buyer’s financial loss incurred in a supply cycle if all suppliers were disrupted D) the probability of a “super-event” that would disrupt all suppliers simultaneously E) the probability of a “unique-event” that would disrupt only one supplier 5) Consider the disaster risk decision tree model. Using the notation from the model, what is the expected monetary value (cost) of choosing two suppliers? A) 2C B) [1-P(2)] × 2C + P(2) × (L + 2C) C) 2C + SL D) P(2) × 2C + [1-P(2)] × (L + 2C) E) 2C + (S+U2)L 6) Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use MORE suppliers? A) lower S, lower U B) lower S, higher U C) higher S, lower U D) higher S, higher U E) higher S, higher U, higher C 7) Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use FEWER suppliers? A) lower L, lower C B) lower L, higher C C) higher L, lower C D) higher L, higher C E) lower L, higher C, lower S 8) Suppose that the manager of a company has estimated the probability of a super-event sometime during the next five years that will disrupt all suppliers as 0.23%. In addition, the firm currently uses three suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next five years to be 1.4%. What is the probability that all three suppliers will be disrupted at the same time at some point during the next five years? A) 4.4203% B) 0.2300% C) 4.4300% D) 0.2297% E) 0.2303% 9) Suppose that the manager of a company has estimated the probability of a super-event sometime during the next three years that will disrupt all suppliers as 2%. In addition, the firm currently uses four suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next three years to be 20%. Supplier management costs during this period are $50,000 per supplier. The financial cost incurred if all four suppliers are disrupted at the same time is estimated to be $10,000,000. What is the expected monetary value (cost) of the current supplier diversification arrangement? A) $412,800 B) $415,680 C) $10,200,000 D) $215,680 E) $8,240,000 10) In the disaster risk decision tree model, a(n) ________ disrupts all suppliers simultaneously.