Answer -2

Supply chain visibility refers to the ability to track and monitor the movement of products,
materials, and information across the entire supply chain.

Supply chain managers often prioritize inventory visibility because it provides them with
crucial information about the stock levels and location of inventory at different stages of the
supply chain.
Here are some reasons why inventory visibility is highly valued:

1. Demand Planning: Accurate and up-to-date inventory visibility allows supply chain
managers to assess current stock levels and anticipate future demand
2. Inventory Optimization: With inventory visibility, supply chain managers can identify
excess or obsolete inventory, minimize stockouts, and optimize inventory levels.
3. Supply Chain Coordination: Inventory visibility enables better coordination among
different participants in the supply chain. It allows suppliers, manufacturers, and distributors
to have a clear understanding of inventory availability, ensuring smoother collaboration and
synchronization of activities.
4. Customer Service: Having visibility into inventory levels helps supply chain managers
meet customer demands promptly.
5. Risk Mitigation: Inventory visibility helps in identifying potential risks and disruptions in
the supply chain. By having clear visibility into inventory, supply chain managers can
proactively respond to changes in demand, supply shortages, or other disruptions,
minimizing the impact on operations.

Answer -6

Vertical integration refers to the strategy of a company expanding its operations by acquiring
or integrating with other companies along the supply chain, either backward or forward and It
involves consolidating different stages of production, distribution, or value-added activities
under a single ownership or control.
Backward integration occurs when a company integrates with or acquires a supplier or a
company involved in an earlier stage of the supply chain. By backward integrating, a
company gains control over its inputs, ensuring a stable supply of raw materials,
components, or services.
Examples of backward integration include:

1. A clothing retailer acquiring a textile manufacturer to secure a consistent supply of fabrics

and control quality.
2. An automobile manufacturer purchasing a steel mill to have direct access to steel and
better control over costs and production schedules.

3. A fast-food chain acquiring a potato farm to ensure a steady supply of potatoes for its
french fries.

Forward integration, on the other hand, happens when a company integrates with or
acquires a distributor or a company involved in a later stage of the supply chain. Forward
integration allows a company to gain control over the distribution channels or reach the end
customers directly.
Examples of forward integration include:

1. A beverage manufacturer acquiring a chain of retail stores to sell its products directly to
consumers.

2. An e-commerce platform launching its own delivery and logistics services to have more
control over the last-mile delivery and enhance customer experience.

3. An electronics manufacturer opening branded retail stores to sell its products directly to
consumers, bypassing third-party retailers.

Answer -7

RFID (Radio Frequency Identification) is a technology that uses radio waves to identify and
track objects or assets remotely. It consists of two main components: RFID tags and RFID
readers.

1. RFID Tags: RFID tags are small electronic devices that consist of a microchip and an
antenna. The microchip stores unique identification data
2. RFID Readers: RFID readers are devices that emit radio waves and capture the signals
transmitted by RFID tags. The reader sends out a radio signal, and when an RFID tag
comes into range, it responds by sending its unique identification data back to the reader.
The role of RFID in the digital supply chain is significant. Here are some ways RFID
technology enhances supply chain operations:
1. Improved Inventory Management: RFID enables real-time tracking and visibility of
inventory throughout the supply chain. By attaching RFID tags to items, companies can
monitor their movement, location, and stock levels accurately.

2. Enhanced Traceability and Product Authentication: RFID enables precise tracking of

products from production to delivery. It helps authenticate products, ensure product integrity,
and combat counterfeit goods.
3. Streamlined Logistics and Warehouse Operations: RFID automates and speeds up
processes such as receiving, shipping, and inventory counts. RFID tags can be read quickly
and simultaneously, allowing for efficient scanning and data capture. This automation
reduces manual errors, minimizes handling time, and increases operational efficiency in
logistics and warehouse operations.
4. Efficient Supply Chain Visibility: RFID enables real-time monitoring of goods in transit,
enabling supply chain stakeholders to track shipments, monitor delivery status, and identify
any delays or issues.
5. Improved Customer Experience: RFID technology enables faster and more accurate
order fulfillment, leading to improved customer satisfaction. It allows retailers to track
products in stores, optimize shelf replenishment, and provide personalized shopping
experiences, such as self-checkout or interactive product displays.

Answer -8
Digitization is a concept that refers to the transformation of analog or physical processes into
digital form, utilizing technologies such as automation, data analytics, Internet of Things
(IoT), artificial intelligence, and cloud computing. It has the potential to bring significant
benefits to various sectors, including manufacturing, healthcare, agriculture, and services, in
Pakistan and globally. However, there are certain barriers and challenges that organizations
may encounter while implementing the concept of Industry 4.0 and digitization in Pakistan.
Let's examine them:

1. Infrastructure Challenges: The successful implementation of digitization requires robust

and reliable digital infrastructure, including high-speed internet connectivity, data centers,
and communication networks. In Pakistan, limited access to high-quality internet and
inadequate infrastructure can pose challenges to widespread adoption and implementation
of digitization.
2. Skill Gap: The effective utilization of digital technologies and Industry 4.0 concepts
requires a skilled workforce. There might be a significant skill gap in Pakistan, with a
shortage of professionals trained in areas such as data analytics, artificial intelligence,
cybersecurity, and automation.
3. Cost and Affordability: Implementing digitization and Industry 4.0 technologies can
involve significant investment in hardware, software, and infrastructure. For small and
medium-sized enterprises (SMEs) in Pakistan, the cost of adopting these technologies might
be a barrier.
4. Security and Privacy Concerns: The digitization of processes and data brings new
challenges in terms of cybersecurity and data privacy. Protecting sensitive data from cyber
threats and ensuring compliance with privacy regulations are critical considerations.
5. Regulatory Framework: The presence of clear and supportive regulatory frameworks is
essential for the successful implementation of digitization initiatives. Policies and regulations
related to data governance, intellectual property rights, data localization, and cybersecurity
need to be established and enforced in Pakistan to provide a conducive environment for
digital transformation.
6. Change Management and Mindset Shift: Digitization requires a cultural shift and
change management within organizations. Resistance to change, lack of awareness, and a
traditional mindset can hinder the adoption of new technologies.
7. Collaboration and Ecosystem Development: Digitization efforts in Pakistan would
benefit from strong collaboration between the public sector, private sector, academia, and
research institutions. Creating a supportive ecosystem that encourages knowledge sharing,
innovation, and public-private partnerships is crucial for driving the adoption of Industry 4.0
technologies.

Answer -4

A. To develop an ABC Classification system for the 10 items, we need to rank them based
on their annual demand value. The classification is typically done by dividing the items into
three categories: A, B, and C, with A representing the most important items and C
representing the least important ones. The classification is based on the Pareto principle,
where a small percentage of items (A) accounts for a significant portion of the total value,
while a large percentage of items (C) represents a smaller portion of the total value.

Sorting the items based on their annual demand value in descending order, we can classify
them as follows:

A Category:
1. G2 - Annual Demand: 300 units, Cost/Unit: $1500.0

B Category:
1. F3 - Annual Demand: 500 units, Cost/Unit: $500.0
2. A2 - Annual Demand: 3000 units, Cost/Unit: $50.0
3. J8 - Annual Demand: 2500 units, Cost/Unit: $5.0
4. D1 - Annual Demand: 6000 units, Cost/Unit: $10.0

C Category:
1. C7 - Annual Demand: 1500 units, Cost/Unit: $45.0
2. I5 - Annual Demand: 1750 units, Cost/Unit: $10.0
3. H2 - Annual Demand: 600 units, Cost/Unit: $20.0
4. E9 - Annual Demand: 1000 units, Cost/Unit: $20.0
5. B8 - Annual Demand: 4000 units, Cost/Unit: $12.0

B. Mr. Zaheer can use this information in the following ways:

- Inventory Management: The ABC Classification helps in prioritizing inventory management
efforts. A items require close monitoring and tighter controls due to their higher value and
impact on the business. B items require moderate attention, while C items can be managed
with simpler and less intensive processes.
- Replenishment Planning: A items should be carefully managed to avoid stockouts and
ensure availability. B items may require periodic review and replenishment, while C items
can be managed with more relaxed replenishment policies.
- Supplier Negotiations: The classification can be used to negotiate favorable terms with
suppliers for high-value items (A category) or identify opportunities for cost savings and
efficiency improvements for lower-value items (B and C categories).

C. Mr. Zaheer might place item A2 into the A category based on its high annual demand of
3000 units and relatively high cost per unit of $50.0. Although it has a lower total cost
compared to some other items in the B category, its significant annual demand justifies its
classification in the A category. Additionally, the Pareto principle suggests that a small
number of items (A category) typically contribute to a significant portion of the total value,
and A2 fits this criterion.

Answer -5

To calculate the values required, we can use the following formulas:

a. Economic Order Quantity (EOQ):

EOQ = √((2 * D * S) / H)

Where:
D = Annual demand = Quarterly demand * Number of quarters in a year = 3750 * 4 = 15000
units
S = Cost per order = $75
H = Annual holding cost per unit = 33.33% = 0.3333

Plugging in the values:

EOQ = √((2 * 15000 * 75) / 0.3333) ≈ 957.42 units

b. Annual Holding Costs:

Holding Cost = EOQ * (H / 2)

Plugging in the values:

Annual Holding Costs = 957.42 * (0.3333 / 2) ≈ $159.53

c. Annual Ordering Costs:

Ordering Cost = (D / EOQ) * S

Plugging in the values:

Annual Ordering Costs = (15000 / 957.42) * 75 ≈ $1173.60

d. Reorder Point:
Reorder Point = Demand during lead time

Since the lead time is 2 working days, and the company operates 300 days per year, we
need to convert the lead time to the number of working days:
Lead Time in working days = (Lead time in calendar days / Number of calendar days in a
year) * Number of working days in a year
Lead Time in working days = (2 / 365) * 300 ≈ 1.64 days (approximated to 2 days)

Therefore, the reorder point is equal to the demand during the lead time:
Reorder Point = Demand per day * Lead Time in working days
Reorder Point = (3750 / 90) * 2 ≈ 83.33 units (approximated to 84 units)
In summary:
a. The economic order quantity is approximately 957.42 units.
b. The annual holding costs are approximately $159.53.
c. The annual ordering costs are approximately $1173.60.
d. The reorder point is approximately 84 units.

Answer -3

To calculate the reorder point for notebook binders, we need to consider the demand during
the lead time.
Here's how to calculate it:

1. Determine the demand per day:

Demand per day = Annual demand / Number of business days per year
Demand per day = 10000 / 300 = 33.33 units per day

2. Calculate the lead time in working days:

Lead time in working days = Lead time in calendar days - Number of weekends and holidays
Assuming there are no weekends or holidays in the lead time of 5 calendar days, the lead
time in working days is equal to 5 days.

3. Calculate the reorder point:

Reorder Point = Demand per day * Lead time in working days
Reorder Point = 33.33 * 5 = 166.67 units (approximated to 167 units)

Therefore, the reorder point for notebook binders at Meyer's stationary shop is
approximately 167 units. This means that when the inventory level reaches 167 units, Brad
Meyers should place an order to replenish the stock in order to avoid running out of
notebook binders during the lead time.