1. OPERATIONS MANAGEMENT Business Research and Service Institute LLC
CISCOM®
SUPPLY CHAIN &
OPERATIONS MANAGEMENT
Business Research and Service Institute LLC
Pennsylvania, USA
brasi.org

2. CISCOM® Certificate in Supply Chain & Operations Management
Case Study Exercise
Business Research and Service Institute LLC

3. Agenda Read the Case Study carefully and identify key information.
Calculate the required output, utilizing the data and applicable formulae.
Answer the questions based on the outputs and your best judgment.

4. Supply Chain Overview BRASI Watch Company (BWC)
BWC is a distributor of sports watches
“Tracker” is a popular brand of BWC
Supply Chain Overview
Tracker

5. Supply Chain Overview The company has a problem
Variability in the supply has resulted in stock shortage and lost sales.
Supply Chain Overview
Last year, 20 orders
were cancelled due to supply issues.

6. The Path forward
You were hired as a Supply Chain Consultant to analyze the situation and suggest changes.
The data in the following pages was made available for your analysis.
Supply Chain Overview

7. Supply Chain Overview Customer Service
The desired customer service level is 95%.
It is estimated each 1% change in customer service level represents 3,000 units of sale.
Currently, there is no safety stock
to absorb variability in supply
and/or demand. Supply lead time
two weeks.
Supply Chain Overview

8. Supply Chain Overview Capacity and Inventory
The manufacturing process is labor intensive, comprising assembly of purchased components. Capacity can be scaled up or down by hiring semi-skilled workers. Cost of hiring and laying off is small, compared with inventory holding cost.  
Supply Chain Overview

9. Supply Chain Overview Forecast Performance Month Forecast Actual Sale
January
3000
3700
February
2000
1900
March
2700
2600
April
12000
13500
May
21000
19500
June
20500
25000
July
21500
August
5000
4500
September
1300
1800
October
9000
November
13000
December
4000
Supply Chain Overview

10. Supply Chain Overview Financials Cost/unit = $30.00
Sales Price/unit = $40.00
Selling and Admin Expenses per year = $ 30,000
Cost of carrying inventory = 20%
Sale last year = 120,000 units
Procurement set-up cost per purchase order = $300.00
QC inspection cost per order = $90.00
Receiving and stocking cost per order = $15.00
Purchase lot size = 10,000 units, in packs of 100 units
Average shipping quantity to the customer = 1,000 units
Supply Chain Overview

11. Supply Chain Overview Question 1: Demand Pattern
Is the product seasonal? If yes, what could be the drivers of its seasonality?
Supply Chain Overview

12. Supply Chain Overview Question 2: Manufacturing Strategy
Which Manufacturing strategy would you recommend, i.e., Level or Chase? Why?
Supply Chain Overview

13. Question 3: Economic Order Quantity
Does the purchasing lot size represents the EOQ? If not, then what should be the lot size? Estimate the savings from switch to the EOQ.

14. Question 4: Safety Stock
What is the current customer service level?
Would you recommend safety stock?
If yes, how much safety stock will bring the customer service to the desired 95%?
What would be the holding cost per year of the safety stock?

15. Question 5: Financial Impact
What would be the net trade-off between safety stock carrying cost and expected change in sales?

16. Supply Chain Overview Question 6: How would you implement the change?
Assuming that your recommendations are accepted, provide a plan to implement the changes. Include the following:
Departments/functions to be involved
Milestones and time lines
Key Performance Indicators to ensure compliance and sustainability
Supply Chain Overview

17. Supply Chain Overview Reference Case Study Work Space
Note: The work space has solutions and calculations.
Please use it as a tutorial once you have attempted to answer the questions yourself.
Contact your instructor for any clarifications
Supply Chain Overview