Amity Think Tank Round 1

A company produces 500 units of a product per day. The production cost per unit is $10, and

the holding cost per unit per day is $0.50. If the company uses a periodic review system with

a review period of 5 days, what is the optimal order quantity?

• 1,250 units

• 1,500 units

• 1,750 units

• 2,000 units

Answer explanation

To determine the optimal order quantity, we need to calculate the Economic Order Quantity (EOQ).

EOQ = √(2 × Demand Rate × Ordering Cost) / Holding Cost

EOQ = √(2 × 500 units/day × $100/ordering cost) / $0.50/unit/day

EOQ = √(100,000) / 0.5

EOQ = 1,414.21 units ≈ 1,500 units (rounded to the nearest whole number)

Therefore, the optimal order quantity is 1,500 units.

What is the concept of "bullwhip effect" in Supply Chain Management?

• The phenomenon of increasing demand variability as one moves up the supply chain

• The phenomenon of decreasing demand variability as one moves up the supply chain

• The phenomenon of stable demand variability throughout the supply chain

• The phenomenon of unpredictable demand variability throughout the supply chain

Answer explanation

The "bullwhip effect" refers to the phenomenon of increasing demand variability as one moves up the supply chain. This occurs when small changes in consumer demand are amplified as they move up the supply chain, resulting in larger and more unpredictable fluctuations in demand.

A company uses a transportation mode that costs $0.50 per unit per mile. If the company

needs to transport 500 units from a warehouse to a distribution centre that is 200 miles

away, what is the total transportation cost?

• $50,000

• $25,000

• $10,000

• $5,000

Answer explanation

To determine the total transportation cost, we need to multiply the number of units by the distance and the cost per unit per mile.

Total Transportation Cost = Number of Units × Distance × Cost per Unit per Mile

Total Transportation Cost = 500 units × 200 miles × $0.50/unit/mile

Total Transportation Cost = $50,000

A company has a supply chain network with three suppliers, two manufacturers, and four

distributors. The company wants to optimize its supply chain to minimize costs. What type

of optimization technique should the company use?

• Linear programming

• Dynamic programming

• Integer programming

• Simulation modeling

Answer explanation

Linear programming. Linear programming is a type of optimization technique that is

commonly used in supply chain management to minimize costs.

A manager is communicating a change in policy to a team of employees. What

communication channel should the manager use to ensure maximum impact and

understanding?

• Email

• Company intranet

• Town hall meeting

• Video conferencing

Answer explanation

A town hall meeting is a face-to-face communication channel that allows for two-way communication, questions, and feedback. It is particularly effective for communicating significant changes or announcements.

A company is experiencing a crisis and needs to communicate with stakeholders, including

employees, customers, and the media. What communication strategy should the company

use to maintain transparency and credibility?

• Deny the crisis and maintain secrecy

• Use social media to provide updates and information

• Hold a press conference to address the media and public

• Use a crisis communication plan to provide timely and transparent updates

Answer explanation

Use a crisis communication plan to provide timely and transparent updates. A crisis

communication plan helps companies to respond quickly and effectively in a crisis, maintaining transparency and credibility.

A manager is communicating performance feedback to an employee. What communication

technique should the manager use to ensure the employee understands and accepts the

feedback?

• The sandwich method (positive-negative-positive)

• The direct approach (straightforward and honest)

• The indirect approach (hinting at the issue)

• The avoidance approach (avoiding the issue altogether)

Answer explanation

The sandwich method (positive-negative-positive). The sandwich method involves

placing constructive criticism between two slices of positive feedback, helping the employee to receive and accept the feedback.

A manager is communicating with a team member who has a different communication style.

The team member is a introvert and prefers written communication. What should the

manager do to ensure effective communication?

• Use verbal communication to ensure clarity

• Use written communication to accommodate the team member's style

• Use a combination of verbal and written communication

• Avoid communication with the team member altogether

Answer explanation

Use written communication to accommodate the team member's style. By using written

communication, the manager can ensure that the team member receives and understands the message.

What is the primary goal of distributive negotiation?

• To create a win-win outcome for both parties

• To maximize one's own gains at the expense of the other party

• To find a mutually acceptable solution

• To avoid conflict altogether

Answer explanation

To maximize one's own gains at the expense of the other party. Distributive negotiation

involves a competitive approach, where one party seeks to maximize their own gains, often at the expense of the other party.

A seller is negotiating the price of a product with a buyer. The seller's cost of production is

$50 per unit, and the buyer is willing to pay $70 per unit. If the seller wants to make a profit

of 20% on the selling price, what should the selling price be?

• $62.50

• $65.50

• $70.25

• $75.50

Answer explanation

To calculate the selling price, we need to find the cost of production plus the desired profit

margin.

Desired profit margin = 20% of the selling price

Let x be the selling price.

20% of x = 0.2x

Cost of production + profit margin = selling price

$50 + 0.2x = x

0.8x = $50

x = $62.50