Explain 5 differences between Porters and Hines value chains.
Question 1: Value Chains and Supply Chain Management
a) Explain 5 differences between Porters and Hines value chains.
(10 marks)
b) A local micro-brewery have experienced a huge increase in online sales. The increase in demand for online sales started during the first lockdown and has grown ever since. The brewery have heard that a pull system is a way to be more responsive to consumer demand.
Highlight 5 advantages of a pull system. (10 marks)
Discuss 5 things that the brewery may have to consider if moving to a pull system
(10 marks)
c) The UK has seen a significant growth in the number of craft breweries within the region. As such there is a need for suppliers to consider the location of their storage and warehousing facilities. A major supplier is looking to locate a warehouse within the West Midlands, close to 6 of its main customers. You have been provided with the information in the table below and tasked to:
i) Determine the best location for the warehouse using the Centre of Gravity method.
(5 marks)
ii) Critically appraise the method by discussing 6 other considerations when deciding on the location of a warehouse.
(15 marks)
Location of customers Coordinates Value of business
£000 per annum
A (27, 32) 34
B (12, 47) 14
C (41, 15) 90
D (9, 16) 23
E (17, 18) 10
F (15, 25) 5
Total 50 marks
Question 2: Quality Management, Lean Management, Sustainability
a) With reference to lean philosophy, identify the 7 types of waste associated with muda. Give examples for each type of waste.
(21 marks)
b) A local bakery, specialising in the production of celebration cakes such as birthdays and wedding cakes, is receiving a large number of customer complaints, concerning the quality of their products, mainly focusing on the taste of the cakes. Using an Ishikawa diagram, create a suitable diagram which indicates what might be going wrong. You should highlight at least 2 causal factor in each category of the diagram. (20 marks)
c) Explain Christopher Laslos 3 reasons for embedding sustainability in to the operations of a business organisation.
(9 marks)
Total 50 marks
Question 3: Capacity Management and Inventory Management
a. Explain the difference between Design, Effective and Actual capacity. (15 marks)
b. Describe the concept of Capacity Lag strategies. Highlight 5 conditions that need to be present if a business is to successfully adopt such a strategy. (15 marks)
c. A retail business is considering using the ABC system of inventory control, where:
Category A focusses on the fewest items which account for at least 80% of the companys annual expenditure on inventory
Category B focusses on those items that are not Category A but account up to an 95% annual expenditure on inventory
Category C focusses on all other items.
Using the following inventory line information below, identify their categories based on the Companys definitions above. Show your answers in tabular format.
Inventory line Cost per item (£) Annual usage (units)
A 2 550
B 12 425
C 10 25
D 1.5 100
E 0.5 300
F 9 75
G 3 350
H 3.5 35
I 11 125
J 6 75
(15 marks)
Given your answer to the above question, discuss 2 implications for a business for those items which you have identified as category A items?
