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Assignment Textbook questions
Chapter 6: Designing Global Supply Chain Networks
Question: Describe the importance of decision trees, summarize in your word the steps in decision tree analysis methodology, and describe how periodic discount rates for each period is decided
Discuss in your own words three strategies to mitigation risk in global supply chains.
Importance of Decision trees
A decision tree is a graphical representation of the possible solutions to the decision based on certain conditions. Decision trees usually have several advantages that are very useful in management.
a). Comprehensive -Decision trees force a consideration of all the possible outcomes of a decision and traces each path to a conclusion. It creates a comprehensive analysis of the consequences along each branch and identifies decision nodes that need further analysis.
b). Easy to us e-Decision trees are always easy to use whereby they represent visually all of the decision alternatives for quick comparisons in a format that is still easy to understand.
c). Versatile-multiple of business problems can be analyzed and solved using the decision trees since they are handy tools for business managers and anyone else who has to make decisions under uncertain conditions.
Steps in decision tree analysis methodology
In a decision tree analysis methodology, one has to follow several sequence steps for it to be successful. The steps may include:
- Before drawing the decision, tree one is supposed to define the problem in which the decision tree is likely to solve for example the financial data for a company.
- Construct the decision tree that illustrates all of the issues that you need to explain and represent it in an organized scheme for the process.
- After the drawing, apply now the correct values to the branches and the sub-branches that are available in the tree.
- After using the values in the departments, locate the particular branch of the tree that has the most significant expected value or that maximizes the decision criteria.
- List the underlying assumptions to enable others to know the risks they may be taking when they decide to use the results of the decision tree.
Many startup businesses and also larger enterprises find themselves restructuring their organization to use the opportunities that are presented by the ongoing global due to increasing customer demand and competitive pressures. This has led to supply chain risk concern that today’s executives must address.
Strategies to mitigation risk in the global supply chains
i). The supply chain risk is said that it can be categorized into types of dangers and sources from the atomistic to holistic. Holistic sources require a comprehensive analysis of the entire supply chain making this approach to be most appropriate for the risk assessments.
ii). Also, the supply chain risks can be categorized into qualitative or quantitative risks whereby the qualitative risks involves inadequacies in reliability, accuracy, and precision of the materials or the components.
iii). Quantitative risks involve the overstocks, out-of-stocks, customer discounts, and the obsolescence or lack of availability which may also impact the speed to the markets.
Question 2: Discuss the difference between the moving average and exponential smoothing. When will you use one over the other?
The exponential moving average and the simple moving average are said to be similar since they all measure the trends and interpreted in the same manner and they are both used by the technical traders to smooth out the price fluctuations.
The two measurements usually have some differences that associate them which is the sensitivity each one shows to the changes in the data that is being used in its calculation.
The simple moving average data is said to calculate the average of price while the Exponential moving average is reported to have more weight to the current data.
Exponential moving average usually places a higher weight on the recent data than on the older data since they are more reactive to the latest price changes.
The simple moving average is always calculated by dividing the sum of the set of the prices by the total number of costs that is in the series.
Because of this, the exponential moving average is the most preferred average among the others since its results are always more timely than that of the simple moving average.
List some of the random components you can expect in demand for beer.
In the demand of beer or any other commodity, there are those components that one can expect to find which may include the following:
i). The seasons of the beer will determine much. This may affect the type of beer that is brewed, and that is wanted by the customers
ii). The sporting events.
iii). Government policies.
iv). The individual income
v). The weather conditions in that place
vi). The availability price
Work Cited
https://www.scribd.com
https://www.datacenterknowledge.com
https://www.studymode.com
https://www.small business.com