Which of the following are disadvantages of the small-capacity strategy in capacity planning? Select ALL that apply.
Answer(s): A,B
The small-capacity strategy means a company deliberately produces below optimal capacity. This provides agility and flexibility to respond to market changes and allows for customer personalisation.However, the disadvantages include:Higher production costs (lack of economies of scale)Weaker ability to compete on price (since larger-capacity businesses have lower production costs) Options C and D are disadvantages of large-capacity strategy, not small-capacity. (See LO 1.3)
A simple supply chain consists of three commercial roles. What are these?
Answer(s): A,B,C
A basic supply chain consists of three key roles:Supplier Provides materials or products to the organisation Organisation The business that processes/manages the product Buyer The final customer who purchases the productDistributor and Manufacturer exist in more complex supply networks, but they are not part of the simplest supply chain model. (See LO 1.1, p.3)
Which of the following describes a Proprietary Network?
Answer(s): A
A Proprietary Network is a privately owned and controlled group.Option B refers to a Social NetworkOption C describes a Bureaucratic NetworkOption D refers to an Asymmetric NetworkTip: Learn these definitions well, as they frequently appear in exam questions! (See LO 1.1)
Ping Lin Ltd is a toy manufacturer based in Chin
Answer(s): B
The Bullwhip Effect describes how small changes in demand at the consumer level create larger variances in supply chain orders upstream. It leads to inefficiencies, overstocking, or shortages. Note: This is also known as the Forrester Effect (not "Forrest Effect"--that was a trick!). A famous real-world example occurred during COVID-19, when panic-buying caused toilet paper shortages.For more insights, read:The Bullwhip Effect & Toilet Paper Shortages (See LO 1.1, p.12)
Company A manufactures wheels for Company B, which manufactures cars. Traditionally, Company A would complete the wheels and conduct quality assessments before sending them to Company B, which would then begin assembling cars. However, a new CEO at Company B has introduced a technology system that enables simultaneous production, meaning Company B starts manufacturing cars at the same time Company A begins producing wheels.What is this new system known as?
Answer(s): C
Start to start means two different organisations at different levels of the supply chain begin their work simultaneously rather than sequentially. This is the opposite of a start to finish system, where the next process starts only when the previous one is completed. (See LO 1.2, p.19)
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