transportation
TIM 125
Phase 4
Drone4Life
Professor Subhas Desa
Group 26
Chelsie Baker
Janne Chua
Ke Xu
Tieshan Zeng
Kelly Zheng
1.safety inventory
2.design facility network
3.design transportation network
4.safety inventory module
5.transportation module
6.facility module
7.user manual
8. Executive summary
1. Define:
· SP1:Make sure that you complete all the tasks that we agreed upon during our Phases 2, project meetings. “Benchmark” (calibrate/compare/contrast) your SCM approach and implementation against Plantronics (see Problem 6 in HW #5).
· SP2:Complete your implementation of cycle and safety inventory for your SC network.
· SP3:Two important new SCM drivers that you should now work on, while we are covering the material in class, are Facilities and Transportation Network (see “Readings” above).
· SP4: Work on implementing the software (Information) automation for your project using Excel and Visual Basic. For example, create and link demand forecasting module, product cycle and safety inventory modules, transportation module and facilities module.
· SP5: Attempt to simulate your product’s supply chain and examine various scenarios using your integrated software.
· SP6: Align and integrate your high-level strategies (from Phases 1, 2) with the detailed implementations of each driver.
· SP7: Develop the proper SC management guidelines for your team’s product, as well as a simple user’s manual for your software module.
2. Plan
· What information is available for solving the problem?
· For SP1-SP7, we have:
· Lecture Notes of SCM
· Online resources
· Notes of Cycle Inventory
· Notes of Safety Inventory
· Software Integration
· SCM drivers
· What assumption need to be made to make the solution process manageable?
· We have business analysts and data analysts to analyze the problems
· Audience: the CEO, CTO and Dev, team.
· What analysis needs to be performed to resolve the issues defined in Step 1?
· SP1: Complete the benchmark work, comparison with Plantronics
· SP2: Indicate the cycle inventory and safety inventory
· SP3: Facility and Transportation network
· SP4-5: Software Integration and do a lot of scenarios(calculate the value by using the software)
· SP6: Align and integrate the high level strategies
· SP7: do the SCM guidelines for our products
· How can you provide the information?
· Bullet points
· Description
· Excel tables
· Visual Basic
· Calculations
From TA:
One supplier
Transportation
Inventory
Facilities
Cycle calculations
Dont calculate all suppliers, select one
Select one location
Cycle Inventory and Safety Inventory
1. Define:
· Indicate the cycle inventory and safety inventory
2. Plan
·
3. Execute
SP2: Complete your implementation of cycle and safety inventory for your SC network.
Cycle Inventory for Motor:
Use the list of equation to find our cycle inventory amount:
Annual Ordering Cost = (D/Q)*S
Annual Holding Cost = (Q/2) * hC
Optimized lot size = Q* = sqrt(2DS/hC)
Number of annual orders = D/Q
Total annual Cost = Annual Order Cost + Annual Holding Cost
a. Find EOQ(optimal lot size)
b. Find number of shipments/year(optimal order frequency)
c. Cycle inventory
d. Cycle inventory holding cost/Annual holding cost
e. Find replenishment cycle time (order frequency)
f. Annual Ordering Cost
Annual Demand(D) = 18852
Per Unit Cost(C) = $5000
Holding Cost(hC) = 10% = $500
Shipping Cost/Setup Cost/Cost per order (S) = $200
a. Find EOQ(optimal lot size)
EOQ = QL* = = = 122.807
b. Find number of shipments/year(optimal order frequency)
D/QL* = 18852/122.807 = 153.508 ≈ 153.5 shipments/year
c. Cycle inventory
QL*/2 = 122.807 /2 = 61.403 ≈ 61.4 units
d. Cycle inventory holding cost/Annual holding cost
Cycle inventory * hC = 61.4 * 500 = $30701.79
e. Find replenishment cycle time (order frequency)
T = 365/n = 365/61.4 ≈ 2.38 days
f. Annual Ordering Cost
(D/Q) * S = 153.5 * 200 = $30701.79
g. Total Annual Cost:
Total annual Cost = Annual Order Cost + Annual Holding Cost = $30701.79 + $30701.79 = $61403.58
Safety Inventory:
Annual demand (Forecasted) = 18852
Average Weekly Demand = 18852/52 = 362.5
Desired CSL (%) = 95
Lead time (weekly) = 0.34 week
SS = 1.64 * sqrt(0.34) *362.5 =346.65
ROP = DL + SS = 362.5*0.34 + 346.65 = 469.9
SS=346.65
Q
(Items)
T (Time)
(Weeks)
Safety Inventory Model
Lead time = 0.3 weeks
Lot Size: 122.807
ROP=469.9
Demand:
362.5
Because all of our parts are only required one for each products, so the safety inventory of all the parts are the same.
SP2: Facility Network
Define:
· Define the problem: after doing the cycle and safety inventory, two important new elements (SCM drivers) of your project are designing/implementing a Facilities Network
Plan:
· Process to design the facility network
Execute:
Each target city are close to the main army base in each state.
Step 1: distance between warehouse and demanded army base
|
Target state |
Richmond |
Los angeles |
San Antonio |
Columbus |
Phoenix |
|
Richmond,VA |
0 |
2234 |
1263 |
701 |
1829 |
|
San jose |
2873 |
339.8 |
1692.4 |
2479.3 |
710.8 |
|
Austin |
1471 |
1378 |
79.5 |
1235.2 |
1005.9 |
|
Atlanta |
532.5 |
2183 |
988 |
567 |
1845 |
|
San diego |
2634.2 |
120.6 |
1275.7 |
2227.2 |
354 |
Step 2: The transportation cost = $1.69* miles
Step 3: Forecasted demand in each region for
Step 4: The Excel sheet for Facility design
Conclusion：
As shown, the best option is to open the plants in Richmond, Austin and San Diego with lowest cost of $23489.7.
Transportation Network:
Define : Implement process and design for transportation network
Plan: the process for transportation network design
Execute:
Step1: Which mode of transportation should be used ?
Total cost =Transportation cost + inventory holding cost
Inventory cost = cycle inventory cost + safety inventory costs + in-transit cost
Conclusion: The mode of transportation we should use is the Truck because the Truck has the lowest cost than other modes of transportation
Step 2 and Step 3: Should inventory be aggregated spatially? Should orders be aggregated in time ?
It should be spatially aggregated because it will minimize the total cost and we made a Excel sheet to analyze three different scenarios
Conclusion: based on the three scenarios, we should choose the truck as transportation mode and make the number of stocking location as small as possible, because it will save a lot of safety inventory cost. The scenario 3 of truck mode is the best option
Step 3: Rank of transportation modes and conclusion:
User Manual
Sheet1:
Choose a Module Window:
· Demand Forecasting Button: Click to select Forecasting method to perform
· Inventory Button: Click to perform Inventory management computations
· Transportation Button: Click to perform Transportation management
· Facilities Button: Click to perform Facility management
Demand Forecasting Module:
· Static Forecasting Button: Click to perform Static Forecasting
· Moving Average Button: Click to perform Moving Average Forecasting method
· Simple Exponential Smoothing Button: Click to perform Simple Exponential Smoothing forecasting method
· Holt’s Method Button: Click to perform Holt’s method of forecasting
· Winter’s Method Button: Click to perform Winter’s method of forecasting
Static, Moving Average, Simple Exponential Smoothing, Holt’s, and Winter’s Forecasting Modules:
· Enter the demand data in spreadsheet Sheet1 from A2 to A21
· Click the specific Forecast method button to run the forecast
· Back button: Click to finish and get back to sheet1
Inventory Module:
· Enter values required in the textbox then click the “Calculate the cycle inventory” or “Calculate the safety inventory” Button to calculate the accordinate inventory values and create a metrics in spreadsheet
· MessageBox pops out “ The values are compute to the spreadsheet”
· Close Button: Click to exit
Facilities Worksheet:
· Solver Button: Click to calculate optimization of facilities