1. What are the underlying forces that led to K&S’s desire to make changes to its current supply chain network? (15 marks) 2. Based purely on financial considerations, should K&S expand the current capacity in Israel or open a new plant elsewhere? Use the data in the case study to calculate the three-year cost for each of the options. (30 marks)
This is supposed to be a table : Country Efficiency (units / worker / hour) Average Hourly Wage Unit Shipping Cost to Asia Unit Shipping Cost to US and Other Investment cost in $US million Capacity (million units) Manufacturing Cost / Unit Total Unit Cost to Asia Total Unit Cost to US and Other 3-year cost Israel Israel expansion Jordan Singapore China Assumptions: 1. The demand of 8-million applies to each of the next three years.
2. K&S will produce to meet demand.
3. Capacity will be greater than 8 million. So K&S will have to decide where to meet that demand from. 4. 83% of demand is in Asia and 17% from the rest of the world (relevant because of differences in shipping costs)
5. For Singapore, Jordan and China, it makes sense to utilize their full capacity (because of lower unit cost to Asia) and supply the balance from Israel.
3. As well as costs, what other factors should K&S take into account in the decision to redesign its supply chain network? Identify the key factors and then evaluate the 4 options, using a table rather than in an essay (35 marks).
This is supposed to be a table: Factor China Singapore Jordan Israel Expansions TOTALS 4. What recommendation would you give to K&S regarding the choice of location for expansion and redesigning the supply chain? What implementation risks and challenges do you foresee? How would you address those risks and challenges? (20 marks)