NATIONAL SCHOOL OF BUSINESS MANAGEMENT
BSc (Hons) Operations and Logistics Management – 21.1 / 21.2
Year 01 Semester 02 Examination
20th July 2022 (8.30 AM to 1.30 PM)
PU CMN 1211 – Introduction to Logistics
Instructions to Candidates
1) Answer all the questions (Both Part A and Part B)
2) Time allocated for the examination is five (05) hours (Including downloading
and uploading time).
3) All the theory related questions should be type set. Handwritten answers for
theory related questions will not be considered for grading.
4) All calculations related questions should be handwritten. No excel calculations
are accepted. You may insert the captured images of the handwritten
calculations of relevant questions in correct order of the answer script. Put the
question numbers correctly and be responsible not to jumble the sub-sections
of main questions.
5) Weightage of Examination: 60% out of final grade
6) Download the paper, provide answers to the selected questions in a word
document.
7) Please upload the document with answers (Answer Script) to the submission
link before the submission link expires
8) Answer script should be uploaded in PDF Format
9) Under any circumstances E-mail submissions would not be taken into
consideration for marking. Incomplete attempt would be counted as a MISSED
ATTEMPT.
10) The Naming convention of the answer script – Module Code_Subject
name_Index No
11) You must adhere to the online examination guidelines when submitting
the answer script to N-Learn.
12) Your answers will be subjected to Turnitin similarity check, hence, direct
copying and pasting from internet sources, friend’s answers etc. will be
penalized.
Page 1 of 6
PART - A
Question 01
A. Ga & Ja (Pvt) Ltd produces soft drinks. The manufacturing process starts with
purchasing raw materials from many local suppliers. The cherry flavouring, vanilla
flavouring, lemon flavouring, and lime flavouring are purchased to produce soft drink
syrup. Also, the organization purchases water, carbon dioxide, glass bottles, and
Aluminium tins for the soft drink manufacturing process. After the manufacturing
process, the finished goods are stored in its own warehouse. Then the soft drinks are
distributed to the retailers, and vending machines before reaching the final customers.
I. Draw the supply chain of Ga & Ja (Pvt) Ltd including all the supply chain entities.
Mention all the processes clearly. (8 Marks)
II. Explain the terms upstream supply chain and downstream supply chain using the
supply chain diagram of Ga & Ja (Pvt) Ltd. (4 Marks)
III. Mr. Bandara, the warehouse manager of Ga & Ja (Pvt) Ltd suggests to get the
warehouse service from a third-party logistics (3PL) service provider than owning a
warehouse. Do you agree with his suggestion? Why? (4 Marks)
IV. “A logistics manager is a specialist as well as a generalist”. Explain the statement
mentioning the responsibilities of a logistics manager. (4 Marks)
B. “Transportation is the actual physical movement of goods and people between two
points”.
XYZ (Pvt) Ltd produce coffee powder and distributing through its three distribution
centers (DC-1, DC-2, and DC-3). Four retailers (R1, R2, R3, and R4) buy coffee powder
from XYZ (Pvt) Ltd. The availability of coffee powder in each distribution center (in
kgs), the requirement of coffee powder of retailers (in kgs), and the unit
transportation costs are given in the table below,
R1 R2 R3 R4 Availability
DC-1 110 100 140 120 120
DC-2 80 140 100 130 150
DC-3 55 70 80 120 130
Requirements 150 100 175 75
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I. Explain the role of transportation in logistics using examples. (5 Marks)
II. Solve the above transportation problem using Vogel’s approximation method and find
the initial basic feasible solution. Find the total transportation cost. (8 Marks)
III. Solve the above transportation problem using North – West corner method and find
the initial basic feasible solution. Find the total transportation cost. (5 Marks)
IV. Based on your calculation, suggest the most suitable transportation assignment. And
calculate the saving. (2 Marks)
(Total – 40 Marks)
PART - B
Question 02
1. Explain the differences between Fixed Order Quantity and Fixed Time Period inventory
models using appropriate diagrams. (4 Marks)
2. Piramal Glass Ceylon PLC is the only glass manufacturing company in Sri Lanka with a
rich history spanning over 60 years. As the island’s sole manufacturer, Piramal Glass
offers the entire moulded range of glass bottles for the food and beverage,
pharmaceutical, liquor, and cosmetics and perfume industries.
Piramal Glass Ceylon PLC uses EOQ logic to determine the order quantity for its various
components and is planning its orders. Piramal Glass Ceylon PLC has been purchasing
a raw material in lots of 7000 units. This number of raw materials are enough to fulfill
two-months demand of their customers. The cost to place one order, including
shipping fees, unexpected transportation costs, inspection fees, and other expenses
necessary to acquire inventory product, is Rs. 1,200. The cost per unit is Rs. 50, and
the carrying cost is 6% of its unit cost.
(i) Calculate the ordering, holding, and total inventory costs for the current order
quantity? (2 Marks)
(ii) Calculate the economic order quantity (EOQ). (2 Marks)
(iii) How many orders will be placed using the economic order quantity (EOQ) annually?
(1 Mark)
(iv) Calculate the ordering, holding, and total inventory costs for the economic order
quantity (EOQ)? (2 Marks)
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(v) Explain how has ordering cost, holding cost, and total inventory costs are changed?
(2 Marks)
(vi) How much can Piramal Glass Ceylon PLC save per year by purchasing the raw materials
in the most economical quantities? (1 Mark)
3. The management of inventories is currently a key component of manufacturing
organizations all around the world. Lean manufacturing, service part logistics, and
vendor managed inventories are a few of the best practices. Using examples from the
real world, describe how Lean Manufacturing is utilized to manage inventory.
(6 Marks)
(Total - 20 Marks)
Question 03
1. Teascloset (Pvt) Ltd. is a recently established apparel manufacturer located in
Colombo, Sri Lanka. The company was established by Isaac Trine, who has nearly ten
years of experience in the apparel industry. At a recent meeting to develop the
strategic plan for the company, Isaac Trine said, "According to our vision, we all must
work hard to be a market leader in fashion-knit and fashion outerwear industry by
empowering innovation to provide total customer satisfaction, that drives long term
loyalty." He further elaborated on his idea, "we need to be considerate and attentive
to our business partners, customers, and employees while being responsible
corporate citizens in our society’’.
Supporting Trine's idea, top management proposed what Teascloset should do to
achieve a competitive advantage in the market. As per the top management, the
company will be able to achieve a remarkable place in the industry by offering high-
quality ready-made garments while prioritizing on facilities such as customized wear,
on-time delivery, especially when it comes to online orders.
Also, a senior business analyst explained his opinion about the future of the industry,
"Sadly, even market experts do not have a clue about the next six months of the
country." Hence, we are passing through an extremely uncertain period. Therefore,
we need to prepare an occupancy plan for the next 7 months.
You, (Mr. William), are appointed to assist the board in developing an accurate
occupancy plan as an expert in logistics management and operations excellence.
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Prepare a brief report explaining quantitative and qualitative forecasting techniques
and the ideal sales forecasting method available to Teascloset (Pvt) Ltd, highlighting
the advantages and disadvantages of the suggested method (you may develop a
detailed report by covering relevant theories). (10 Marks)
2. Following table is generated for Tokyo Cement Company (Lanka) PLC’s past data on
deliveries.
Period Cement Deliveries (Dozens)
1 670
2 612
3 653
4 791
5 767
6 878
7 782
8 984
9 1012
10 1122
(i) Develop a linear trend equation for the data on Cement deliveries of Tokyo Cement
Company (Lanka) PLC (5 Marks)
(ii) Forecast Cement deliveries for periods 11 to 14 (2 marks)
(iii) In which period they can expect to deliver 2229 Cement? (3 marks)
(Total - 20 Marks)
Question 04
1. Assume that you have been appointed as the Logistics Manager of a cement
manufacturing company. The company is planning to locate a central warehouse in a
suitable location. Logistics Director asked you to prepare a small report that explains
the factors to be considered when selecting the location, importance of those factors,
and the methods to analyse and select the location. Draft a small report including the
necessary information and the steps you follow to select the suitable location.
(7 Marks)
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2. “The burger doodle” restaurant chain uses a distribution center to prepare the food
ingredients to deliver to their individual restaurants. The company is in the process of
determining the location for a new distribution center that will provide services for
five restaurants. The grid map coordinates of the five restaurants and the annual
number of 40-foot trailer truck transported to each restaurant are as follows,
Coordinates Annual Truck
Restaurants
X Y Shipments
1 100 300 35
2 210 180 24
3 250 400 15
4 300 150 19
5 400 200 38
(i) Determine the suitable location using the center of gravity method. (3 marks)
(ii) Plot the five restaurants and the proposed new distribution center on a grid map.
(2 Marks)
3. A manufacturing firm is considering 3 locations for a plant to produce a new product.
The three locations have fixed and variable costs as follows,
Locations Fixed Cost (Annual) Variable Cost (Per Unit)
Moratuwa 80,000 20
Dehiwala 140,000 16
Maharagama 120,000 18
(i) Draw the total cost lines of each city in the same graph. (6 Marks)
(ii) If they expect to produce 10,000 units, find the best location to locate their
plant using break even analysis. (2 Marks)
-END OF THE PAPER-
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