Supply Chain Management

Supply Chain Management 150 150 Affordable Capstone Projects Written from Scratch


Higher Diploma in Business in Supply Chain Management CW_BRSCM_H_Y5



Module Title


Supply Chain Planning & Control


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Take home assignment






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Question 1 (20 marks)


(Part A)


XYZ Ltd. makes two types of garden sheds: the Apex and the Arch. These are made in the same factory and use the same labour and equipment. The following information is available from their cost accountant:


  • Each shed costs €300 to produce requiring an average of 3.2 hours labour;
  • Each employee works 160 hours/month and there is no ceiling on the number of employees;
  • The cost of hiring/firing an employee is €300;
  • The monthly holding cost of inventory is €15/unit;
  • At the end of December there were zero sheds in stock and twenty employees.


The Sales people give you the following forecast:


Month Apex Arch
January 650 3,048
February 676 2,899
March 624 3,198
April 624 2,671
May 696 2,919
June 475 3,102
July 566 2,964
August 819 2,409
September 754 3,381
October 982 3,965



  1. Develop a level production plan for XYZ Ltd. for the 10-month planning period. Calculate the total production, hiring, layoff, and inventory costs for your plan.                                                                 (3 marks)


  1. Repeat the calculations for part a) except this time base your calculations on a chase production plan.                                                                                                 (4 marks)



  1. If hiring and firing costs increase dramatically which production would you favour and why?                                                                                                 (5 marks)

(Part b)


You are given the following information:


Month Forecasted








January 800 pieces 1,150 pieces 0 pieces 350 pieces
February 1,000 1,150 0 500
March 1,200 1,150 0 450
April 1,400 1,150 0 200
May 1,600 1,150 150 0
June 1,500 1,150 350 0


  • Each piece sells for €500.
  • Regular production costs are €350/unit, overtime production costs are €450/unit.
  • The cost of holding inventory is €10/unit per month.


  1. Develop a monthly cash flow analysis for the above showing both net cash flow and cumulative net cash flow for each month.                 (3 marks)


  1. Why do the cash flow for April and May look healthier than the other months? What does this tell us about holding inventory in a level production plan?                                                 (5 marks)

Question 2 (20 marks)



The following is data received from a credit union detailing loans approved and the interest rate applied to these loans.


Month Interest Rate Number of Loans
1 7% 20
2 5% 30
3 4% 35
4 8% 18
5 10% 15
6 6% 22
7 11% 15
8 9% 20
9 5% 27
10 12% 10


  1. Develop a regression forecast model using the interest rate as the independent variable.                                                                                                 (5 marks)


  1. Is this a time series or causal model? Explain your answer. (5 marks)


  1. How many loans would the credit union expect to make if the interest rate is 10%? 6.5%?                                                                                                                 (3 marks)


  1. Are the results for part c as you would expect? Please explain your answer.                                                                                                 (3 marks)


  1. Calculate the coefficient of correlation and explain what we can determine from it.                                                                                                 (4 marks)


Question 3 (20 marks)


SuperComputer is a computer store that sells various computer hardware and software. You have been given the following information regarding a certain laptop:


Average weekly demand (52 weeks/year) 60
Standard deviation of weekly demand 12
Order lead time 3 weeks
Standard deviation of order lead time 0
Unit cost €350
Order cost €2
Annual unit holding cost €48
Service level 99% (z = 2.33)


  1. What is the EOQ for the laptop?                                 (3 marks)


  1. Calculate annual ordering and holding costs for the laptop (ignoring safety stock). What do you notice and how would this affect your stocking policy?                                                                                                 (5 marks)


  1. If SuperComputer currently order 120 laptops at a time, how much more or less would SuperComputer pay in annual holding and ordering costs if they were to order just 12 laptops at a time?                                                                                 (3 marks)


  1. What is the reorder point for the laptop and how much of this consists of safety stock?                                                                                                                                                 (3 marks)


  1. What are the annual holding costs when considering safety stock? How much of this cost is due to the safety stock being held?                                                 (3 marks)


  1. If SuperComputer want to reduce their order lead time to one week what would be the new safety stock and how would this affect annual holding costs?                                                                                                                 (3 marks)















Question 4 (20 marks)


  1. Advanced Electronics produces two simple circuit boards on one of its assembly lines. The following data shows the board’s reference and their respective BOM.


End Product Board 1 Board 2
Planned Production 4 3


  Component Reference
End Product X Y Z
1 1 1 0
2 1 0 1


Using mixed model scheduling, determine a production schedule

(14 marks).


  1. A work centre can process 1,800 pieces hourly. It takes 45 minutes for this work centre to receive material from the previous process. A kanban system is in place with each container holding 90 units and a safety level of 10% is employed, Determine the number of kanbans that should be utilised

(3 marks).


  1. How can inventory mask problems in production and what are the risks associated with holding inventory?                                 (3 marks).




















Question 5 (20 marks)


  1. Briefly describe what you understand the term JIT to mean. What are the goals of JIT?                                                                                                                         (5 marks).
  2. The Bill of Materials (BOM) for product A is shown below. The MPS for product A calls for 120 units to be started in each of weeks 2, 4, 5 and 8. Data from the inventory records are shown below. Develop the material requirements plan for the next eight weeks for each item using the templates provided                                                                         (15 marks).
Data Category B C D E F  
Lot Sizing Rule L4L FOQ = 700 FOQ = 700 L4L L4L  
Lead Time 3 weeks 3 weeks 4 weeks 2 weeks 1 week  
Safety Stock 0 0 0 50 0  
Scheduled Receipts 150 (week 2) 450 (week 2) 700 (week 1) None 1,400 (week 1)  
Beginning Inventory 125 0 235 750 0