Homework #1 (Due – April 18, 2013) Electronic Submission MS Word MSc ECOM/ICOM assignment submission system File name: hw1 and your HKU ID (e.g. hw1_1234567) Please limit the answer to 1 page for each (sub)question (60%) Case: Dell Inc.: Improving the Flexibility of the Desktop PC Supply Chain (Textbook, pp.179-187)
a) Why does L5 incur higher manufacturing and logistics costs than L6? What are some of the costs that are incurred in L5 but not in L6? Are there any costs that apply to only L6 but not L5? b) Which of the six proposed manufacturing solutions should Dell implement, based on the survey result (Table 6-1)? Why? What are the pros and cons of this recommendation? c) How easily sustainable is your recommendation for the previous question if the chipset supply shortage further deteriorates? d) How good is the methodology employed by the BPI team to determine the optimal manufacturing option for Dell? Are there more effective approaches? e) How can Dell effectively address the root causes contributing to the increase of L5 manufacturing? 2. (20%) Is it possible for the appropriate supply chain (push, pull, or push-pull) to change during a product’s life cycle? If not, explain why? If it is possible, what are some specific examples of products for which the appropriate supply chain changed?
3. (20%) Bullwhip a) Why bullwhip occurs in a supply chain? b) Does that contradict with the risk pooling in terms of variability? Explain. c) Can the bullwhip be alleviated if the number of levels for the supply chain is reduced (e.g. eliminate the distributors)? If so, why don’t we just keep the supply chain as flat as possible (i.e. reduce the number of the levels required in the supply chain as much as possible)?
Homework #1 Dr. Benjamin Yen