Description
Supply Chain Management
Dec 2025 Examination
Q1. A national electronics retailer is experiencing rapid growth and is struggling to meet rising customer expectations for faster deliveries and lower shipping costs. Currently, the company operates a centralized warehouse model, resulting in long lead times for customers in distant regions. The executive team is considering a redesign of the distribution network and is evaluating whether to add regional warehouses or invest in advanced technology for route optimization. They must balance operational costs, service levels, and scalability while aligning with the company’s strategic goals. Based on the scenario, how should the company apply a structured network design framework to optimize its distribution network for both cost efficiency and customer responsiveness, considering the trade-offs between centralized and decentralized warehousing? (10 Marks)
Ans 1.
Introduction
For a national electronics retailer experiencing rapid growth, supply chain design becomes a critical driver of competitiveness. As customer expectations for faster deliveries and lower shipping costs intensify, the current centralized warehouse model reveals clear inefficiencies. Long lead times for distant customers not only erode satisfaction but also weaken loyalty in a highly competitive market. The executive team faces a strategic decision: expand to regional warehouses or rely on advanced technologies for optimization. Each option carries trade-offs in terms of cost efficiency, service responsiveness, and scalability. Applying a structured network design framework provides
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Q2 (A). A global electronics manufacturer is expanding into new markets across Asia and Europe. The company must decide whether to centralize its distribution centers in a few strategic locations or decentralize them closer to key markets. Each option presents different implications for transportation costs, lead times, inventory management, and service levels, especially given varying regulations and demand patterns in each region. Assess the trade-offs faced by a global electronics manufacturer when choosing between centralized and decentralized distribution facilities. Critique how these choices impact transportation costs, lead times, inventory levels, and customer service, especially in the context of fluctuating international demand and regulatory environments. What recommendations would you make to optimize facility location strategy? (5 Marks)
Ans 2a.
Introduction
For a global electronics manufacturer expanding across Asia and Europe, distribution network design is a critical strategic decision. The company must evaluate whether to centralize distribution in a few hubs or decentralize facilities closer to regional markets. Both options carry significant trade-offs involving transportation costs, lead times, inventory levels, and customer service. These challenges are compounded by fluctuating international demand, diverse regulations, and cultural variations. A careful assessment of centralization and decentralization is essential to optimize responsiveness, efficiency, and
Q2(B). A leading Indian textile manufacturer maintains a constant production rate throughout the year, relying on inventory buildup to meet high demand during wedding and festive seasons. While this approach ensures product availability, it results in high inventory costs and occasional stockouts. The operations manager is considering whether to adopt a more flexible aggregate planning strategy that leverages demand forecasting and variable workforce arrangements. Evaluate the aggregate planning strategy of a textile manufacturer that uses a level production approach to meet seasonal demand spikes during Indian wedding and festive seasons. What are the strengths and weaknesses of this strategy, and how could integrating demand forecasting and flexible workforce management improve outcomes? (5 Marks)
Ans 2b.
Introduction
In India’s textile industry, seasonal demand peaks during weddings and festivals create unique operational challenges. The manufacturer in this scenario follows a level production strategy, maintaining constant output year-round and building inventory to meet peak demand. While this ensures availability, it also results in high carrying costs and occasional mismatches between supply and demand. Evaluating the strengths and weaknesses of this approach, alongside possible improvements through demand forecasting and workforce flexibility, highlights how aggregate planning can be better
