AMBAI Certificate M&BA Program - Logistics and Supply Chain Management

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Study Guide	This is a Study Guide. As the name implies, it guides the student in the reading of the textbook, Virtual MBA. The The textbook is divided into 12 Chapters and each chapter into several Sections. Sections are numbered consecutively from the beginning to the end of the textbook. We will refer you to the textbook by citing the Section number. This Subject is based on Chapter X of the textbook.
Supply Chain & Logistics	The Supply Chain is customer oriented and its "links" are all processes that end with the timely supply of the end product to the customer. Now please read Sections 108. to 111. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Question 1 The Supply Chain has different components according to the type of business. But for a manufacturing enterprise, there are three basic typical elements. Which are they? See Model Answer A1
	Question 2 We used the term "logistics" in the course. Which elements did we mention as the parts of "logistics"? See Model Answer A2
The internal conflict of interests	The managers of different processes in a company have "conflicting interests". They must be put aside for an efficient management of the entire Supply Chain. Now please read Sections 112. to 117. of the textbook and return to this point of the Guide. Please answer the questions.
Self- evaluation questions	Question 3 Why is John, the Production Manager of McEla, in favor of long production runs of the same SKU, as opposed to shorter runs of alternative SKU's? See Model Answer A3
	Question 4 This question may be a bit unfair, since we did not mention the subject in the course. But give it a try. If a company manufactures perishable goods, there is another extra cost in keeping excess inventories of finished goods. Which do you think this cost may be? See Model Answer A4
The Cost of Capital. Special Software	The conflicting interests of managers often result in disregard of a key factor of profitability: the cost of capital. Software can be used to support decisions in Supply Chain management. Now please read Sections 118. to 126. of the textbook and return to this point of the Guide. Please answer the questions.
Self- evaluation questions	Question 5 The practice of keeping higher than necessary inventories of raw materials and finished goods is in conflict with one key factor in a business' profitability. Which is it? See Model Answer A5
	Question 6 We mentioned an element of forecasting where the use of specialized software or mathematical formulae can be helpful. Which is it? See Model Answer A6
Capacity Planning	After a sales forecast has been agreed to, it will be necessary to estimate the plant capacity needed. Now please read Sections 127. and 128. of the textbook and return to this point of the Guide. Please continue
Production Planning. MRP: Formula Explosion	The actual manufacturing requires a detailed production plan. On this basis, we need to calculate the requirements for the production: the Manufacturing (Material) Requirement Planning (MRP). Now please read Sections 129. to 131. of the textbook and return to this point of the Guide. Please answer the questions.
Self- evaluation questions	Question 7 Remember John Smith, the Production Manager of McEla? Well, recently he was presented with a Sales Forecast for the next three years. He did his (Plant) Capacity Planning exercise, and realized that he would need a 15% increase in capacity to meet the forecast. Now, he must look into several alternative actions to recommend the best one to management. Which do you think may be those alternatives? See Model Answer A7
	Question 8 McEla just finished the Production Plan for next July. They now will "explode" the formulae of the products to be made, by the respective quantities. What will they get as a result of that formula explosion? See Model Answer A8
The net requirements. Revisions. MRP software. JIT	The formula explosion yields the gross requirements. We now must calculate the net requirements. Software packages are available to help calculations. Now please read Sections 132. to 137. of the textbook and return to this point of the Guide. Please answer the questions.
Self- evaluation questions	Question 9 McEla already obtained the gross material requirements for the month of July. What is the calculation to be made for each component, to obtain the net material requirements? See Model Answer A9
	Question 10 McEla's main competitor, Zoap Inc., does not apply the Supply Chain Management concept. They prepare a yearly forecast on which they base a production plan, and proceed to execute the production plan regardless of how much the real sales deviate from the forecast. What would be some of the possible consequences of this conduct? See Model Answer A10
Here we say: So long!	This is the End of the Study Guide for the Subject Logistics and Supply Chain Management.

A2 - We mentioned warehousing and transportation. However, it is necessary to point out that some companies are organized in such a way that Purchasing is also a part of "logistics". Back
A1 Obtaining the necessary raw materials, at the right time, in the right quantity and of the correct quality. Producing the goods to satisfy customer demand with the required quality and in quantities that allow timely delivery without causing excessive stocks. Delivering to customers where, when and in the quantities they expect according to the terms of sale. Back
A4 - Excess inventory of perishable goods increases the risk of loss due to products reaching the end of their "shelf life" (useful life) before being sold. Back
A3 - Because each time he changes the production line from one SKU to another, he has an idle time for setting up, increasing the production unit cost. Back
A6 - The analysis of past sales history and tendencies, and their projection into the future Back
A5 - The Cost of Capital. Obviously, the interest the business pays for loans, but also the investment of the owners or shareholders. Back
A8 - The gross material requirements. Back
A7 - These are the most obvious alternatives John may evaluate and recommend: a) Increase plant capacity b)Look for a toll packer c) Suggest that the forecast is reduced. Back
A10 - a) Excessive inventory of finished goods in all SKUs, or b) Sales lost for lack of inventory in all SKUs, or c) Excessive inventory in some SKUs and loss of sales for stock-outs in other SKUs Back
A9 - Quantity (Qty) On hand plus Qty On order less Qty Committed less Security level = Qty Available The difference between the Qty Available and the Gross requirement is the Qty to be ordered. Back

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