Montessori Spindle Box Teaching resource aims/engagement/next steps/evaluation/Leuven Scales
Draw a decision tree reflecting the uncertainty over the next two periods. Identify each node in terms of demand and exchange rate and the transition probabilities. (8 marks)
If management at Teens Forever is to pick only one of the two suppliers, which one would you recommend? What is the NPV of the expected profit over the next two periods for each of the two choices? Assume a discount factor of k = 0.1 per period. (6 marks)
What do you think about the hybrid approach? Is it worth paying the local supplier extra to use it as part of a hybrid strategy?
For the hybrid approach, assume that management will order a base load of 900 units from the Chinese supplier for each of the two periods, making up any shortfall in each period at the local supplier.
Evaluate the NPV of the expected profits for the hybrid option assuming a discount factor of k
= 0.1 per period. (6 marks)
Instructions
Read the assignment document above and understand the requirements of the two tasks. Develop an Excel workbook to help answer the questions of each task. Write a Word report showing the procedures and steps you have followed to work out the solutions.
The following should be noted:
Task 1 carries 10 marks while Task 2 carries 20 marks.
The Excel workbook should comprise multiple worksheets showing the models or the calculations you used to answer the questions in Task 1 and Task 2.
For Task 1, there should be four worksheets showing the following three demand forecasting methods that you are required to use to forecast the demand of Domino’s Pizza as well as a comparison of model performance using the KPIs mentioned in
Question 2 of the task:
(a) Moving average method
(b) Exponential smoothing methods
(c) Holt’s model
(d) Performance comparison of the three methods using the KPIs
For Task 2, there should be three worksheets showing the following three sourcing decisions of Teens Forever that you are required to explore:
(a) Onshoring
(b) Outsourcing
(c) Hybrid sourcing
The Word file should report the process and the steps you have taken to obtain the findings. It also answers all the questions in Tasks 1 and 2.
The marks received depends on the accuracy of the procedures and the results, as well as the clarity and comprehensiveness of the models and the report.
