Exam Supply Chain Network Design (EBM040A05)
November 4, 2014
Questions 1,2,3,4,5: 75 credits
Your name and student number:
Exercise 1 Supply Chain Network Design for houseplants
Consider a supply chain of houseplants. Royal Horticultural Company Lemkes functions in
this supply chain as a logistics service provider for European retail chains dealing in
houseplants. The core capability of Lemkes is to distribute houseplants from growers to
retailers all over Europe. On a daily basis, retailers can electronically review the assortment
and electronically place their orders. From its cross-docking centre, the management of
Lemkes confirms the order by email. Plants can be ordered at Lemkes both in small quantities
and in full trolleys. Demand for houseplants highly varies during the year. Huge demand
peaks can be noticed just before Valentines Day, Mother’s Day, Eastern and Christmas. In the
winter demand is low. It is expected by Lemkes that the demand will double in the coming
five years. Lemkes receives the orders of the retailers and totals them for each of the 250
growers. The growers are notified by fax about the types of houseplants and the order size.
The growers confirm the orders also by fax. The next morning, the growers themselves
deliver the houseplants to the cross-docking centre of Lemkes. At the cross-docking centre the
plants are at a storage area distributed over trolleys of the various retailers. At the end of a
day, these trolleys are loaded into trucks and transported to the retailers. The retailers are
asked to send the empty trolleys back to the cross-docking centre with the next truck. The
transport from the cross-docking centre to the retailers and back is outsourced to an external
transport company. Each day Lemkes requests electronically a number of trucks from the
external truck company to transport the trolleys with houseplants to the retailers. The truck
company confirms this request by submitting the truck schedule by email to Lemkes. The
total time between a retailer’s order and the delivery of the houseplant to the retailer is about
48 hours.
The management of Lemkes would like to start a project to study what changes in the supply
chain design and internal operations are needed to deal with the expected increase in demand.
1
November 4, 2014
Questions 1,2,3,4,5: 75 credits
Your name and student number:
Exercise 1 Supply Chain Network Design for houseplants
Consider a supply chain of houseplants. Royal Horticultural Company Lemkes functions in
this supply chain as a logistics service provider for European retail chains dealing in
houseplants. The core capability of Lemkes is to distribute houseplants from growers to
retailers all over Europe. On a daily basis, retailers can electronically review the assortment
and electronically place their orders. From its cross-docking centre, the management of
Lemkes confirms the order by email. Plants can be ordered at Lemkes both in small quantities
and in full trolleys. Demand for houseplants highly varies during the year. Huge demand
peaks can be noticed just before Valentines Day, Mother’s Day, Eastern and Christmas. In the
winter demand is low. It is expected by Lemkes that the demand will double in the coming
five years. Lemkes receives the orders of the retailers and totals them for each of the 250
growers. The growers are notified by fax about the types of houseplants and the order size.
The growers confirm the orders also by fax. The next morning, the growers themselves
deliver the houseplants to the cross-docking centre of Lemkes. At the cross-docking centre the
plants are at a storage area distributed over trolleys of the various retailers. At the end of a
day, these trolleys are loaded into trucks and transported to the retailers. The retailers are
asked to send the empty trolleys back to the cross-docking centre with the next truck. The
transport from the cross-docking centre to the retailers and back is outsourced to an external
transport company. Each day Lemkes requests electronically a number of trucks from the
external truck company to transport the trolleys with houseplants to the retailers. The truck
company confirms this request by submitting the truck schedule by email to Lemkes. The
total time between a retailer’s order and the delivery of the houseplant to the retailer is about
48 hours.
The management of Lemkes would like to start a project to study what changes in the supply
chain design and internal operations are needed to deal with the expected increase in demand.
1
