Supply chain management

Effective capacity management involves ensuring a business has the right level of capacity in the right place to match demand.

To what extent is effective capacity management always harder for large, multinational businesses than small businesses?

Which of the following actions would improve the ability of a manufacturer to respond to changes in consumer demand?

Read the information below and then answer the questions that follow.

Disrupted supply

DT is a UK-based business manufacturing circuit boards which it sells to other businesses. All of DT’s output is exported to Europe. The components that DT uses are sourced in the UK.

The supplier of a vital component closed suddenly in early 2020 disrupting DT’s supply chain. DT’s usual pattern of inventory control for this component is shown in Figure 1.

DT was forced to buy this component from a new and more expensive supplier.

DT stated: ‘We had no contingency plan. It was impossible for us to find alternative supplies quickly enough to fulfil all our existing orders. The new supplies had higher levels of defects.’

Figure 1 Inventory control chart showing DT’s usual pattern before disruption

With reference to Figure 1, calculate the lead time.

With reference to Figure 1, calculate the re-order quantity.

With reference to Figure 1, calculate how much inventory DT uses each day.

Explain one impact of a fall in the value of the pound on DT’s sales.

Analyse how contingency planning might have helped DT maintain its competitiveness.

Reliability is the most important factor in a business’ choice of supplier. To what extent is this true for all businesses?

Using the data in Appendix C, calculate how many shares Metro Bank plc had issued, as of 6 March 2020.

Using the data in Appendix D, calculate the percentage change in the number of people using online banking from 2009 to 2019.

Explain one possible reason for the change in the share price of Metro Bank plc shown in Appendix C.

The closure of branches is seen as a way for the ‘Big 5’ banks to better match supply with demand.

Analyse how this action might affect the profits of these banks.

To what extent does the data show that new entrants are a significant threat to the ‘Big 5’ banks?

To what extent is changing to cheaper suppliers a good decision for Sunport PLC?