Effects of Suez Canal ship blockage to supply chain management

1. [10 points] What are the main modes of transportation? Provide 1-2 advantages and disadvantage for each transportation mode.
2. [15 points] What is the role of transportation in the supply chain? Discuss in a paragraph (150-200 words) providing examples of how transportation can positively and negatively impact supply chain performance.
3. [15 points] Below are two recent scenarios/challenges that affected supply chains. Select one of them. Explain how it affects the supply chains. Suggest how to mitigate the impact on supply chain for the selected scenario/ challenge. (150-200 words)
   1. Shipping Container Shortage
   2. A container ship getting stuck in Suez Canal
4. [15 points] Identify the appropriate modes of transportation for the following items. Provide reasoning for your choice:
   1. Google Pixel phones (made in China, sold worldwide)
   2. Nike running shoes (made in Vietnam, sold mostly in North America and Europe)
   3. Organic fruits and vegetables (made in South America, sold in North America and Europe)
   4. Pressure treated lumber (made in Albany, GA, sold in across the USA)
   5. Natural gas (see the map, sold in major US cities)
5. [15 points] A hardware manufacturer signs a contract with Home Depot to provide wood screws. The plant nursery has 3 supply locations. They need to deliver to 12 Home Depot stores. The demand at each Home Depot store is 100,000 boxes. The trucks can delivery up-to 20,000 boxes and cost $1,000 per load plus $250 per delivery. The cost of holding one box in inventory for a year is $1.00. The supply chain manager of the hardware manufacturer is considering whether to use direct shipping from the supplier locations to retail stores (full truck loads in each shipment) or setting up milk runs from supplier to retail stores (without a distribution center). In each milk run, a truck may deliver to 2,3, or 4 Home depot stores. (Hint: See the class example and use the Excel template).
   1. What is the total cost (inventory holding + truck cost) for direct shipping option?
   2. What is the minimum total cost for milk-run using full trucks? Calculate the total cost for a truck delivering to 2,3, or 4 locations.
   3. What is the suggested shipping option? If the demand increases to 150,000 boxes per store, would your option change? Why or why not?
6. [15 points] Serum Institute of India (SII) is the world’s largest vaccine manufacturer located in Pune, India. SII purchases the empty vials to store the produced vaccines from a supplier located in Chennai, India. SII purchases 50 million vials from the supplier each year at a price of $0.10 per vial. Each vial weighs 0.05 kgs (20 vials would weigh 1 kg). Following table shows the transportation options available. SII carries a safety inventory equal to 40% of the average demand for vials during the replenishment lead time. The holding cost rate is 25% per unit per year. Assume that there are 365 workdays per year. Also, assume that the transit time is lead time less one day.
   1. What is the total cost (transportation + safety inventory cost + in transit inventory cost + holding cost) for each transportation option?
   2. Which transportation carrier would you suggest? Why?
7. [15 points] What is meant by “tailored transportation”? Providing an example, explain in a paragraph (150-200 words).

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