Question

1. What is an ISP (Integrated Service Provider) for supply chains? (1 point)
A. A consultant agency which integrates the supply chain for companies
B. A 2 PL or a 3PL, but not a 4PL
C. A company supplying transportation and warehousing services
D. A logistics service company specialized in suppling VAS (value added
services)
2. What characterizes a 4 PL? (1 point)
A. They are non-asset based and provides integrated services primarily
supplied by asset based providers, for example 3PLs
B. They are consultant agency firms investigating potential improvements in
supply chains
C. They offer always more extended services than 2PL or 3PL service providers
D. They are always asset based
3. What does geographic postmonement mean? (1 point)
A. The shipment is delivered to the wrong point
B. Establishing a new warehouse location to store goods closer to the market
C. Goods is not shipped further in the supply chain until the receipt of a
customer order
D. Goods is stored as close as possible to the market
4. TQM, Total Quality Management is …. : (1 point)
A. an information system for managers to control quality parameters
B. a management philosophy building on the idea that all functions of a
company can influence the level of customer satisfaction
C. a cost calculation method to continuously measure total quality cost
D. a method of integrating the total supply chain quality matters across
company borders
5. APS, Advanced Planning Systems are used to …. : (1 point)
improve the timing, direction and size of movements in a supply chain with
respect to the demand at the end of the actual supply chain
control the safety stock levels when multiple warehouses
implement Collaborative Planning, Forecasting, and Replenishment
conjoint analysis and forecasting
6. Which combination of transportation operating service characteristics is not
correct? (1 point)
Frequency: pipeline is best; water is worst
Availability: truck is best; pipeline is worst
Capability: water is best; pipeline is worst
Dependability: truck is best; pipeline is worst
7. The most typical VAS, Value Added Service of the following is
(1 point)
Break-bulk and Consolidation
Transportation and Warehousing
Pick/Pack, Repairs and Home delivery
Sales and Marketing
8. Pallets vary in sizes as follows: (1 point)
A. Euro std pallets are 100cm*120cm, US pallets vary in size
B. Sea freight pallets are 100cm*120cm, Euro std pallets are 80cm*120cm
C. US std pallets are 34inches*36inches, Euro pallets vary in size
D. ISO std pallets are 120cm*80cm, Euro std pallets are 100cm*120 cm
9. What is true for diesel emission from trucks in Europe after 2013? (1 point)
A. They need to fulfil the EURO 5 thresholds for NOx and PM per km
B. They need to fulfil the EURO 6 thresholds for NOx and PM per kWh
C. They need to fulfil the EURO 4 which has thresholds for NOx and particles
D. Nitrogene oxides (NOx) and Particle content (PM) have been reduced by
50% during the last 40 years
10. Inventory turnover can be measured in three different ways for a given time
period. Which one is not correct? (1 point)
A. Cost of goods sold / Cost of average inventory
B. Cost of goods sold / Average inventory carrying cost
C. Units sold / Average number of units in inventory
D. Sales revenue / Average inventory at sales value
Write your name on all sheets submitted!
Section II: Essay Questions, 30 points
Begin each numbered question on a new sheet!
Each essay question is worth 4-6 points. Answers should not exceed one page per
question.
Answers of sub-problems a), b), c), d) etc. should be clearly separated from each other
but may be on the same paper.
11. Sustainability
The 4E-model is used to describe four dimensions of sustainability.
a) Which words are the four E standing for? (1 points)
b) Give, for each one of these E-dimensions, a concrete short example (2-10
words per example) of suitable actions in a supply chain operational
organization that aim for improved sustainability (4 points).
12. Inventory planning and calculation.
The graph below expresses the most commonly used and most important
knowledge used for inventory planning and calculation. Copy the graph to your
answer sheet. There are two alternative sets of correct answers to this
question. Choose one of them.
a) Indicate correctly the parameters represented on the y- and x-axis.
(1 point)
b) Indicate what each one of the three curves expresses (1 point)
c) Indicate what characterizes the points where the dotted vertical line
crosses each one of the curves and the value on the x-axis. (2 points)
13. Supply chains.
Draw a large diagram of a typical supply chain covering the whole page of
your answer sheet.
Point out the typical position of the following resources and activities in the
supply chain:
Raw material suppliers, component suppliers, system suppliers, manufacturer
of end products, supply facing warehouses, demand facing warehouses,
distribution centers, retailers, end customers, consolidation, cross-docking,
break-bulk, mixing, in-bound transportation, outbound transportation.
(4 points)
14. Total cost integration in logistical networks.
a) Which are the two major cost components of total network cost? (1 point)
b) Draw a simple graph with total cost on the y-axis and the number of
warehouses on the x-axis. Then draw the principal shape of the curves
for the two cost components asked for in a) and for the total network cost,
showing the relative shape and positioning between those three curves
(4 points)
c) The quantity principle and the tapering principle are two very basic and
very logic principles applied to reach the lowest possible transportation
cost in a network. Explain with your own words what they mean. (1 point)
15. Transport:
a. Explain the meaning of intermodal transport and give one example of it.
(1 point)
b. Explain the meaning of cabotage. (2 points)
c. What is the major difference regarding the deregulation of the US road
transport market and the European road transport market (2 points)
16. Packaging and handling
a) Explain what the following terms refer to: (2points)
o Master carton
o Unitization
o Containerization
o Rigid packaging (i.e containers) and flexible packaging (i.e. pallets)
b) Give examples of manual, mechanized, semi-automated, automated
handling systems and mention one possible advantage and one possible
disadvantage for each one of your examples. (2 points)
17. Integrated operations planning:
a. Describe the bullwhip effect as good as you can. (1 point)
b. What do the letters in the abbreviation CPFR stand for and in which way
can CPFR help eliminate the bullwhip effect? (1 point)
Write your name on all sheets submitted!
Section III: Calculation Questions, 40 points
Necessary formula sheet and tables are supplied at the end of this section. Make sure that it is
easy to understand your answer, your solution and that you answer the actual question. Remember
to use the right units/pieces/kilo/SEK etc. An answer without or with the wrong unit is not approved.
All abbreviations must be clarified. All calculations should follow in a logic sequence.
The answers should be on separate papers for each one of the numbered questions meaning that
the answers for question 18, 19, 20, 21, 22, 23, 24 and 25 should all start on a new paper
Solution and answers of the sub-problems a, b, c, d etc should be clearly separated from each
other but may be on the same paper.
18.Drawings AB is a distributor of pens, brushes and paint. They have a popular
pen called “The sword” with a steady demand of around 100 pieces/ day. The
pens are delivered in order quantities of 2000 pieces. Drawings AB wish to
have a safety stock that will cover one week’s demand. The value of each
pen is 5 SEK. Assume that 1 week is 7 days.
a) Calculate the average inventory level. (2 point)
b) Explain with your own words the logic behind the average inventory level
formula. Show with a graph. (2 points)
19.Company AB have four suppliers and receives deliveries from them every two
weeks according to Table 1. The number of pallets is relatively evenly
distributed over the year, due to the fact that Company AB consumption of
the goods is relatively even. Company AB have a safety stock per product
that corresponds to 20% of the delivered quantities. The inventory carrying
cost percent is 15%. Assume that the year has 52 weeks.
Table 1. Value and number of products from the 4 suppliers.
Supplier Value/Pallet (tSEK) Number of Pallets Every 2 Weeks
1 5 100
2 20 50
3 40 40
4 15 70
a) Calculate average inventory level in pallets (2 point)
b) Calculate average inventory value (2 point)
c) Calculate inventory expense (SEK/year) (2 point)
d) Calculate inventory turnover rate (times/year) (2 points)
e) Calculate throughput time (weeks) (2 points)
20.Sharp AB produces office equipment and one of their most popular products,
a stapler has a demand of 200 000 pcs/ year. To produce one stapler, two
springs are needed. The price for one spring is 3,5 SEK. The company use
an annual inventory carrying cost percentage of 18%, the order cost is
assumed to be 300 SEK. Assume that the year have 52 weeks.
Calculate the Economic Order Quantity for the springs. (2 points)
21.Bike AB produce bikes of different types. Table 2 illustrates the aggregated
demand for one particular type of bike, the “Trekker”, over the past 25 days.
Table 2. Demand of Treeker the past 25 days.
Day Treeker Day Treeker
1 48 14 48
2 60 15 50
3 42 16 58
4 52 17 52
5 50 18 50
6 48 19 40
7 39 20 48
8 50 21 52
9 52 22 42
10 42 23 58
11 61 24 50
12 50 25 58
13 50
a) Is the demand distribution normal? How do you know? Explain. (2 points)
b) Calculate the standard deviation for daily demand. Assume in this case
that the performance cycle is constant. (2 points)
Table 3 summarizes Bike AB’s performance cycles over the past 48
replenishments.
c) Is the performance cycle distribution normal? How do you know? Explain.
(2 points)
d) Calculate the standard deviation for the performance cycle. (2 points)
Table 3. Performance cycle the last 48 delivers
Performance Cycle (Days) Frequency
6 7
7 8
8 9
9 10
10 9
11 8
12 7
e) What is the combined standard deviation under conditions of demand and
performance cycle uncertainties? (2 points)
f) The typical order quantity is 100 units, and Bike AB strive to have a 98
percent product availability level. Calculate the required safety stock and
round to closest whole number. (2 points)
22.Pallet AB distributes pallets to productions cites in the south part of Sweden.
The plant warehouse, placed in Jönköping currently has 900 000 pallets on
stock, 50 000 of these are retained as safety stock. Pallet AB also have three
distribution centers, placed in Malmö, Göteborg and Stockholm. Malmö has
an inventory of 100 000 units and a daily demand of 40 000 units, Göteborg
has an inventory of 115 000 units and a daily demand of 60 000 units.
Stockholm has an inventory of 75 000 units and a daily demand of 42 500
units.
a) How many days will Pallet AB be able to sell the pallets before they run
out of stock, based on the assumed demands? (2 points)
b) How many units must shall each DC have delivered if fair-share-allocation
logic is used? (2 points)
23.Fruit AB distributes fruit-baskets for offices and they have 100 warehouses
around the country. The logistics manager heard about a new trend,
centralizing and are considering to have a more centralized distribution
structure. The warehouses have an average inventory of 125 units, and
receives daily deliveries with an order quantity of 200 units. If reducing the
number of warehouses, Fruit AB overall assume the total cycle stock and total
in-transit inventory to be the same. Each fruit-basket cost 200 SEK, and Fruit
AB uses an annual inventory carrying cost percentage of 22%.
a) How would the aggregated annual inventory expense be affected if Fruit AB
decreased the number of warehouses to only be 25? (2 points)
b) Would you recommend Fruit AB to decrease the number of warehouses to
25? Explain. (2 points)
24.Nova AB manufactures different types of binoculars and telescopes and they
recently made an ABC-classification on their 20 most popular products, based
on volume value. They found that 3 products were in A-class, 7 products in
B-class and 10 products in C-class. However, following this prioritizing
caused some irritated customers since products classified in B or C turned
out to be critical for the customer. The management team has therefore asked
for your help. Make an ABC classification based on both volume value and
criticality. Find the products that Nova AB should focus on, based on volume
value and criticality. For information, see Table 4. (4 points)
Table 4. Classification of products
Product ABC-Classification
based on volume value Criticality
A C III
B A II
C B I
D C II
E A I
F B III
G C II
H A II
I B III
J C I
K C III
L B II
M C II
N B III
O C III
P B III
Q C III
R C I
S C III
T B III

Answer 1

Ans: 1-  D. A logistics service company specialized in suppling VAS (value added
services) is is an ISP (Integrated Service Provider) for supply chains

Ans: 2- A. They are non-asset based and provides integrated services primarily
supplied by asset based providers, for example 3PLs

Ans:3-  C. Goods is not shipped further in the supply chain until the receipt of a
customer order

Ans: 4 - B. a management philosophy building on the idea that all functions of a
company can influence the level of customer satisfaction