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Supply Chains: Haverlee Orchard

Drill 6 ·

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About This Drill

Supply Chains: Haverlee Orchard is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.

This drill explores a supply-chain disruption and response decision and uses an invented company and original figures.

Passage

Haverlee Orchard bottles apple juice. It buys glass bottles from one main supplier. A storm has damaged that supplier's plant, and the supplier now warns of a longer wait before bottles arrive. Haverlee asks two backup suppliers for quotes. The table shows the bottle price and the lead time, which is the number of days between placing an order and receiving it, for all three suppliers.

Bottle price and lead time by supplier

SupplierPrice per bottleLead time (days)
Main supplier (current)$0.4030
Backup A$0.5010
Backup B$0.4521

Questions in This Drill

  1. According to the table, what is the lead time for Backup A?
  2. The number of days between placing an order and receiving the bottles is best described by which supply-chain term?
  3. Haverlee needs 2,000 bottles for its next batch. How much more would those bottles cost from Backup A than from the main supplier?
  4. Why does relying on a single main supplier create a risk for Haverlee, as this situation shows?
  5. Haverlee has already run out of bottles and needs them as fast as possible for an order due soon, even at a higher price. Based on the table, which supplier should it choose?