Answer the question no: 01
Steps:
The major steps involved in opening an easy Internet cafe franchise and their predecessors are listed in the table below:
| Activity | Description | Average Duration | Immediate Predecessors |
| A | Contract is signed with franchisee | 1 week | - |
| B | Space for café is contracted or existing space acquired | 4 weeks | A |
| C | Broadband internet connection | 4 weeks | B |
| D | Desks installed | 1 day | B |
| E | Server delivered and installed | 2 days | B,C |
| F | PCs delivered and installed | 2 days | D,E |
| G | CVM delivered and installed | 1 day | E |
| H | Signage delivered and installed | 1 day | B |
| I | Chairs delivered and installed | 1 day | F |
| J | Testing complete system | 2 days | F,G |
| K | Open for business | 1 day | H,I,J |
The steps the same for each franchise:
No, the steps are not same for each franchise. A more specific planning process, Tan may suggested that orders for equipment for stores opening within the same window of opportunity (meaning that they could wait for several new store’s requests came in as long as the delay in ordering would not delay the project plan for any particular store.
The significance of activities that have predecessors on the plan are given below:
1. Contract is signed with franchisee
2. Space for cafe is contracted or existing
3. space acquired
4. Broadband internet connection
5. Desks installed
6. Server delivered and installed
7. PCs delivered and installed
8. CVM delivered and installed
9. Signage delivered and installed
10. Chairs delivered and installed
11. Testing complete system
12. Open for business
Time to open café:
It should take 74 days to open the cafe once the contract is signed.
Lead times into account:
To areas that managers focus on are the reduction of the replenishment lead time to suppliers and variability of this lead time. The normal approximation of lead time demand distribution indicates that both actions reduce inventories for cycle service levels above 50%.
Safety stock is a function of the cycle service levels, the demand uncertainty, the replenishment lead time and the lead time uncertainty. For a fixed cycle service levels, a manager has three levers that affect the safety stock demand uncertainty, replenishment lead time and lead time uncertainty. Traditionally, a normal approximation has been used to estimate the relationship between safety stock and demand uncertainty, replenishment lead time and lead time uncertainty. Their investigations reveal that “the normal approximation method can lead to large errors in contingency stock say, greater than 25%.
They further conjecture that reducing the fill rate, the proportion of orders filled from stock, “makes total system costs loss sensitive to normal theory mis specification”. Since this will in turn reduce the required safety stock level and thus make the total holding costs a smaller percentage of total system cost.
In particular, we focus on two prescriptions of the normal approximation:
1. For cycle service levels above 50%, reducing lead time variability reduces the reorder point and safety stock.
2. For cycle service levels above 50%, reducing lead time variability is more effective than reducing lead times because it decrease the safety stock by a large amount.
Using the exact demand during the lead time instead of the normal approximation we infer the following:
1. For cycle service levels above 50% but below a threshold, reducing lead time variability increases the reorder point and safety stock.
2. For cycle service levels above 50% but below a threshold, reducing lead time variability increases the reorder point and safety stock, whereas reducing the lead time decrease the reorder point and safety stock.
Exhibit 3 Ordering Lead Times
| No | Items Must be supplied by eIc | Lead time(Days) |
| 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 | CVM CVM spares Desks Light box & name sign panel Can be bought directly by franchisee CVM PC Server Server Rack Server Shelf LAN Modem 10 way power bar PC & power cables MONITORS (cables & adapters) Monitor Stands MICE KEYBOARDS CVM UPS Server UPS Switches Chairs | 90 10 42 14 10 7 28 28 3 10 14 14 28 10 3 3 3 14 14 |
| | Basic Total Add: 17.5% VAT Total Cost of capital @10% | |
Answer to the question no: 02
Should eIc create a centralized warehouse where all equipment and furnishings are staged before forwarding onwards to the franchisees?
Yes EIC should creates a centralized warehouse where all equipment and furnishings are staged before forwarding onwards to the franchisees because of reducing cost. It was noted that if store openings were less, the labor costs were still considered fixed. There are so many advantages if EIC create a centralize warehouse where all equipment and furnishings are staged before forwarding onwards to the franchisees. They are given below-
Reduced Cost
A single warehouse can represent major savings, especially if you choose a location where land or existing warehouse space is inexpensive and one that is central to your customers for faster and easier shipping.
Staffing
staffing a centralized warehouse allows you to target inventory managers with a greater degree of experience or expertise. Since you will need fewer inventory managers, you may be able to hire those that command a higher salary but promote greater efficiency.
Simplicity
so you'll be able to implement new inventory management policies at the centralized warehouse without coordinating efforts throughout multiple warehouses in your supply chain.
Possible Drawbacks
Local warehouses can shorten ship times since there's an increased chance that customers are geographically close to a warehouse
Ans to the question no-3
warehouse involves the characteristics of a market with the overall corporate and marketing vision,mission and goals of the firm. information
Various factors likely to affect customer service and costs are defined and subsequently integrated into an overall evaluation. The appropriate number and geographic sites of warehouses are determined by customer, manufacturing and competitor locations, product requirements, types of transportation, and sales level From a policy viewpoint, warehouses should be established in a logistical system if they can render service or cost advantages.
Considering all of the definition and criteria my suggestion is that the EIC central warehouse should be located at France because France is the EIC’s nearest zone from UK.If the EIC group establish its central warehouse at France the outbound transport to the franchisee costs, labor costs and all other costs will be decreased from £450 per store to £300 per store.
Ans to the question number-4
My Solution to the eIc management Team for recover the problem
some processes that the EIC management team must follow to develop their café business. The processes are given below-
1) integration of supply chain
This innovation allows rapid response to changing customer demands and eliminated the cost of holding “just in case “stock.
2) supply chain integrating
integration within the functions of a firm can be represented by porter’s value chain.
3) company structures
structure is matrix formation which is a compromise between functional focus and product focus. Members communicates with peers in the same function or peers in the same product line. will inevitably increase. This approach is an integral part of supply chain integration.
4) Global business
Managing the supply chain’’ becomes a key focus as international operations must be able to source equivalent supplies anywhere in the world.
Moss Kanter and Dretler (1998) present a different view, suggesting that global strategy is synonymous with holistic approaches.
5) Research methodology
Supply chain management has been by empirical observation and case study.
Disadvantages
A company must also compare and negotiate with suppliers on the terms of price, consistency, and quality. Once the key players of the supply chain are chosen, a process map of the entire supply chain must be constructed.
Most of the value in outsourcing is due to the cheaper labor in foreign countries; many companies are looked at negatively when Americans believe that the company is abusing the human capital of another country by either offering unfair wages or providing unsafe work conditions
THE END
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