KOLEJ UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY, FINANCE AND BUSINESS

ACADEMIC YEAR 2020/2021

APRIL/MAY EXAMINATION

BBDS2043 SUPPLY CHAIN MANAGEMENT

MONDAY, 10 MAY 2021 TIME: 9:00 AM – 12:00 NOON

(3 HOURS)

BACHELOR OF BUSINESS (HONOURS) IN INTERNATIONAL BUSINESS

BACHELOR OF BUSINESS (HONOURS) IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT

BACHELOR OF CORPORATE ADMINISTRATION (HONOURS)

BACHELOR OF BUSINESS (HONOURS) IN MARKETING

Instructions to Candidates:

Answer ALL questions. (100 marks)

 This is an open book final online assessment. You MUST answer the assessment questions on
your own without any assistance from other persons.
 You must submit your answers within the following time frame allowed for this online
assessment:
 The deadline for the submission of your answers is half an hour from the end time of
this online assessment.
 Penalty as below WILL BE IMPOSED on students who submit their answers late as follows:
 The final marks of this online assessment will be reduced by 10 marks for answer scripts
that are submitted within 30 minutes after the deadline for the submission of answers
for this online assessment.
 The final marks of this online assessment will be downgraded to zero (0) mark for any
answer scripts that are submitted after one hour from the end time of this online
assessment.
 Extenuation Mitigating Circumstance (EMC) encountered, if any, must be submitted to the
Faculty/Branch/Centre within 48 hours after the date of this online assessment. All EMC
applications must be supported with valid reasons and evidence. The UC EMC Guidelines apply.

This question paper consists of 3 questions on 5 printed pages.

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STUDENT’S DECLARATION OF ORIGINALITY

By submitting this online assessment, I declare that this submitted work is free from all forms of
plagiarism and for all intents and purposes is my own properly derived work. I understand that I have to
bear the consequences if I fail to do so.

Final Online Assessment Submission

Course Code:
Course Title:
Signature:
Name of Student:
Student ID:
Date:

This question paper consists of 3 questions on 7 printed pages.

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Answer ALL questions.

Question 1

The Challenges of Post COVID-19 in Generating Supply Chain’s Agility

The globalisation of trade and decades-long innovation in supply chain networks have resulted in
significant benefits for all stakeholders in greater efficiencies, lower costs, greater access to markets, to
name just a few. However, Coronavirus (COVID)-19 has exposed vulnerabilities in global supply
chains. Dispersed supply chains offer more possibilities for shocks to penetrate and spread, while
practices such as JIT (just-in-time) and single-sourcing can amplify shocks and lengthen recovery time.

Academics and practitioners have been stressing the importance of agility and resilience in the supply
chain for decades. They have advocated diversification to equip value chains to handle demand and
supply shocks. The issue, however, is that in good times, companies are unwilling to make the larger
investments that have always gone along with diversification, in the form of complexity and coordination
costs. For instances, during COVID-19, hospitals were able to use online platforms to access and share
crucial supplies of personal protection equipment (PPE) and ventilators. Tech giants such as Alibaba
Group Holding Ltd used their shopping and logistics infrastructure to support farmers in Hubei to revive
sales post-lockdown. Apple Inc and Huawei partnered with delivery platform Meituan Dianping to
deliver smartphones to customer’s doorsteps. Rungis, one of the world’s most iconic food markets in
Paris, was able to overcome the lockdown of its business-to-business (B2B) service by connecting a
much-diversified supplier base with a relatively concentrated pool of institutional food or hospitality
companies by starting a new business-to-customer (B2C) service, Rungis Livre Chez Vous (Rungis
Delivered to Your Home) in partnership with a five-year-old start-up.

The common denominator is that these businesses tapped platform solutions to absorb demand-and-
supply shocks and improve the agility of their supply chains. Platforms allowed these businesses to gain
access to multiple, diverse, and reliable suppliers and customers that were previously inaccessible or
were too costly to reach. In addition, these businesses benefited from platform-enabled policies and
processes, focused on assuring quality and building trust among businesses and suppliers. Besides, it
was not only legacy businesses that benefited from partnering with platforms. The first wave of the
pandemic saw platforms teaming up with one another to increase and diversify their reach. Alibaba itself
tapped the online freight platform Freightos to serve its international buyers and sellers. Nairobi-based
Twiga Foods, Africa’s leading B2B start-up, responded to profound demand disruption from its outlets
by collaborating with B2C e-commerce firm Jumia to reroute its fresh produce to Jumia’s end-customers.
Thanks to their platform technology, these two firms were able to merge their diverse demand-and-
supply pools in the face of unprecedented crisis.

But are these observations enough to conclude that integration with platforms is the inevitable future for
every supply chain? There is no doubt that platforms give participating firms the advantages of
diversification, but they are not without cost. Indeed, platforms offer lower coordination costs than a
firm would incur on its own in attempting to diversify its supplier and/or buyer pools, yet the transaction
fees charged by such platforms can be significant. Platforms acting as intermediaries also present a
potential threat to participating firms by controlling the flow of information in the value chain. Moreover,
in the post-crisis period when volatility declines, the economic advantages of platforms may disappear.
For example, Apple may not prefer to continue to use food delivery platforms to deliver iPhones in
China post-COVID, especially when customers are ready to flock back to stores.

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Question 1 (Continued)

Therefore, the next step in moving the supply chain frontier would be for firms to increase or decrease
their degree of engagement with platforms, depending on their current operating circumstances. Firms
can attain such a high degree of agility by proactively investing in a robust platform technology stack
including cloud computing, API (application programming interface)-led connectivity, and integrated
data systems. Firms that ensure that the platform technology stack is integral to their IT and business
strategy will be able to swiftly plug into multiple third-party platforms or build their own network of
suppliers and buyers in the long term. Note that these technologies independently provide firms with
operational advantages such as cost savings due to automation, supply chain transparency and data-
driven business intelligence. However, combined use of these technologies gives firms platform-enabled
agility without a substantial increase in their operating costs.

The platform technology stack has been discussed in the recent past due to its ability to provide
economies of scale, scope, and learning (intelligent automation) to firms. An additional compelling
advantage of such a stack is to permit firms to operate a digital platform-enabled operating system, which
gives them the agility to shift its supply chain structure swiftly and cost-effectively as needed to deal
with the circumstances. Platform-enabled firms have displayed markedly greater resilience during
Covid-19. Digital platform-enabled operating systems should be central to the firm’s strategy in planning
and building an agile supply chain that can respond to supply-and-demand shocks and easily revert to
steady-state operations when the crisis subsides. The future of agile supply chains lies in operational
agility, which will be generated by the technological architecture of firms rather than an operational
strategy choice alone.

Source: Adapted from Gumaledar, A, Hasija, S and Padmanabhan V 2021, Supply Chain Management:
How Can Post-Covid Supply Chains Overcome Barriers to Creating Effective Agility, viewed 17
February 2021, <https://www.theedgemarkets.com/article/supply-chain-management-how-can-
postcovid-supplychains -overcome-barriers-creating-effective>.

Required:

(a) The digital logistics platform such as Meituan Dianping enables companies to improve supply
chain agility. Examine the advantages of digital logistics platform and support your answer with
relevant examples from the case. (10 marks)

(b) Analyse the post COVID-19 challenges for organisations in improving supply chain agility.
Support your answer with relevant examples from the case above. (15 marks)

(c) Discuss FIVE (5) service quality dimensions that the digital logistics platform should consider
in improving post COVID-19’s supply chain agility. (15 marks)
[Total: 40 marks]

This question paper consists of 3 questions on 7 printed pages.

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Question 2

TSMC’s Market Position

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) posted its best-ever quarterly profit and hiked
revenue and capital spending estimates to record levels as it forecast "multiple years of growth
opportunities". The world's top contract chipmaker has become increasingly bullish as remote work amid
the coronavirus pandemic drives demand for advanced chips to power premium devices. Demand that
is expected to continue to surge as 5G technology and artificial intelligence applications are adopted
more widely. TSMC now expects to lift capital spending on the production and development of advanced
chips to between US$25 billion to US$28 billion this year, as much as 60% higher than the amount it
spent in 2020. Demand for chips has been so high that manufacturers around the world are sounding
alarm bells about shortages. Several car makers have seen production plans hit by insufficient supply,
leading TSMC to see a jump in demand from automakers in the fourth quarter.

Source: Adapted from Lee, Y and Blanchard, B 2021, TSMC Logs Highest Quarterly Profits, Sees
Record Revenue and Capital Spending, viewed 17 February 2021,
<https://www.theedgemarkets.com/article/tsmc-4q-profit-rises-23-record-high-workfromhome-iphone-
boost>.

Required:

(a) The production volume for TSMC has shown an uptrend for four consecutive quarters since the
3rd quarter of 2020. It started with 19.8 billion in the 3rd quarter of 2020, 21.5 billion in the 4th
quarter of 2020, 32.7 billion in the 1st quarter of 2021 and 36.8 billion in the 2nd quarter of 2021.
Based on the facts as described, answer the following:

(i) Find the forecast for the 3rd quarter of 2021 by using Naïve approach. (2 marks)

(ii) Find the four-period weighted moving average forecasted volume for the 3rd quarter of
2021 using weights of 0.15 in the 3rd quarter 2020; 0.25 in the 4th quarter 2020; and 0.30
in the 1st quarter of 2021. (3 marks)

(iii) Find the forecasted volume for the 3rd quarter of 2021 by using exponential smoothing
model with a smoothing constant 0.8, whereby the forecasted volume for the 4th quarter
of 2020 is the same as the actual volume for the 3rd quarter of 2020. (5 marks)

(b) TSMC’s manufacturing engineers, who produce integrated circuit (IC) boards have gathered 4
samples of 7 ICs each. The heights of each ICs in unit cm are listed below.

Sample 1 2 3 4 5 6 7
1 9.98 10.34 10.02 9.94 10.44 10.24 9.68
2 10.33 10.22 10.08 10.51 10.41 10.18 10.28
3 9.89 9.77 9.91 10.04 10.01 9.83 9.89
4 9.87 10.13 9.92 9.99 9.1 9.92 9.81

(i) Calculate the overall mean and average range. (4 marks)

(ii) Calculate the upper control limit and lower control limit. (6 marks)

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Question 2 (Continued)

(c) Define continuous improvement and discuss FOUR (4) reasons that the continuous
improvement concept can be implemented in TSMC’s supply chain. Support your answer with
relevant examples. (10 marks)
[Total: 30 marks]

Question 3

(a) Vendor management inventory (VMI) system has been widely adopted by many manufacturing
firms. Using examples, appraise the impact of this system. (18 marks)

(b) Compare and contrast the differences between traditional performance measures and world-
class performance measures. Support your answer with relevant examples. (12 marks)
[Total: 30 marks]

This question paper consists of 3 questions on 7 printed pages.

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Table of Control Chart Constants

X-bar Chart for sigma R Chart Constants S Chart Constants
Constants Estimate

Sample A2 A3 d2 D3 D4 B3 B4
Size = m
2 1.880 2.659 1.128 0 3.267 0 3.267
3 1.023 1.954 1.693 0 2.574 0 2.568
4 0.729 1.628 2.059 0 2.282 0 2.266
5 0.577 1.427 2.326 0 2.114 0 2.089
6 0.483 1.287 2.534 0 2.004 0.030 1.970
7 0.419 1.182 2.704 0.076 1.924 0.118 1.882
8 0.373 1.099 2.847 0.136 1.864 0.185 1.815
9 0.337 1.032 2.970 0.184 1.816 0.239 1.761
10 0.308 0.975 3.078 0.223 1.777 0.284 1.716
11 0.285 0.927 3.173 0.256 1.744 0.321 1.679
12 0.266 0.886 3.258 0.283 1.717 0.354 1.646
13 0.249 0.850 3.336 0.307 1.693 0.382 1.618
14 0.235 0.817 3.407 0.328 1.672 0.406 1.594
15 0.223 0.789 3.472 0.347 1.653 0.428 1.572
16 0.212 0.763 3.532 0.363 1.637 0.448 1.552
17 0.203 0.739 3.588 0.378 1.622 0.466 1.534
18 0.194 0.718 3.640 0.391 1.608 0.482 1.518
19 0.187 0.698 3.689 0.403 1.597 0.497 1.503
20 0.180 0.680 3.735 0.415 1.585 0.510 1.490
21 0.173 0.663 3.778 0.425 1.575 0.523 1.477
22 0.167 0.647 3.819 0.434 1.566 0.534 1.466
23 0.162 0.633 3.858 0.443 1.557 0.545 1.455
24 0.157 0.619 3.895 0.451 1.548 0.555 1.445
25 0.153 0.606 3.931 0.459 1.541 0.565 1.435

Control chart constants for X-bar, R, S, Individuals (called "X" or "I" charts), and MR (Moving
Range) Charts. NOTES: To construct the "X" and "MR" charts (these are companions) we
compute the Moving Ranges as:
R2 = range of 1st and 2nd observations, R 3 = range of 2nd and 3rd observations, R 4 = range of
3rd and 4th observations, etc. with the "average" moving range or "MR-bar" being the average
of these ranges with the "sample size" for each of these ranges being n = 2 since each is based
on consecutive observations ... this should provide an estimated standard deviation (needed for
the "I" chart) of
σ = (MR-bar)/d2 where the value of d2 is based on, as just stated, m = 2.
Similarly, the UCL and LCL for the MR chart will be: UCL = D4(MR-bar) and LCL =
D3(MR-bar)
but, since D3 = 0 when n = 0 (or, more accurately, is "not applicable") there will be no LCL for
the MR chart, just a UCL.

This question paper consists of 3 questions on 7 printed pages.