Supply Chain Management (bow-tie, inventory cycle, monte carlo)

Please answer all of the questions. There are 4 questions and last question should have 1000 word count.  Please also use graphs or diagrams relevant with supply chain management in your answers.

 

Question 1

Your company MTech plc (Medical Technologies plc), based in the South West of the UK (10 miles South of Bristol), manufactures, markets, and sells sophisticated cancer screening instruments (CSI). MTech has a world-wide market for the CSI and manufactures between 500 and 600 sets per year. It also has a thriving business in calibration and repair of CSIs. A major sub- assembly of the CSI is a scanner unit (weighing 25kg with dimensions 1m x 1.5m x 0.75m and costs £15,000) that contains radio-active components and is purchased from a company in Germany (ScannerTech) which is located in a small town 5 kilometres north of Leipzig. The repair and calibration of the CSI always involves the fitting of a new scanner with MTech plc providing a guaranteed turnaround time of 10 days.

The managing director (MD) has asked you to undertake a risk assessment using the Bow-Tie method to ensure that the threats and risks are identified and preventative or mitigations measures are put in place. Brexit is a key driver for this assessment.

The MD has also asked if you can look at ways to add a quantitative method to the Bow-Tie in order to provide figures for an overall risk assessment. You are not expected to implement this extension to the Bow-Tie. See below.

 

 

 

 

 

 

 

 

 

 

 

Question 2

This question concerns Ordering processing.
(a) Study the two-inventory cycle representations in Figure 2.1.

The first shows a theoretical profile; describe the operating level, the safety level, the procurement cycle, the procurement lead time, and the procurement level and safety stock. The second is a representation of an actual inventory cycle,

Comment on the differences between the two profiles and provide an analysis on how you would better manage the company with the second profile.

(b)  What are the important EOQ assumptions and comment if these assumptions are realistic in a real-world situation.

(c)  CalcCo is a manufacturer of calculators, currently producing 200 per week. One component for every calculator is a liquid crystal display (LCD), which the company purchases from LCDCo for £1 per LCD. CalcCo management wants to avoid any shortage of LCDs, since this would disrupt production, so LCDCo guarantees a delivery time of 0.5 weeks on each order. The placement of each order is estimated to require 1 hour of clerical time, with a direct cost of £15 per hour plus overhead costs of another £5 per hour.

What should be the Economic Order Quantity (EOQ), the reorder point (assume no safety stock) and the TC? To ensure production continuity CalcCo determined that the standard deviation of the lead time demand is 20 LCDs. To ensure a 90% confidence of production continuity the company has decided to introduce a safety stock. What is this stock and re-calculate the order point.

(d)  Explain how Monte Carlo Simulation could be used to improve estimates and show how this could be applied.

Question 3

Provide an overview of the risks when setting up a global supply chain for a new electronic system to be used for patient monitoring in hospital intensive care units (ITUs). The system will be designed, assembled, and tested in the UK. The system has a significant software element that is to be developed in India. Electronics will be imported from several Asian counties. The system will be sold world-wide and will need maintenance support for at least 10 years. Upgrades will be expected. Use diagrams and flow charts to explain your answer.

Question 4

From a business perspective it is important for a supply chain to add value. Discuss ways where information technology could lead any value adding initiative. Your answer should address how the value could be obtained and how realistic the implementation would be in an international context. Aim for a 1000-word response.