EXCEL ASSIGNMENTS SUPPLY CHAIN MANAGEMENT

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Transportation a. & b.

COORDINATING FREIGHT
DATA Manufacture (Steel) Transporter (Rapid)
Trucks Required Probability Cumulative Probability
1 0.2 0.2 Truck cost: $ 120.00 Truck Reserve Cost: $ 60.00
2 0.3 0.5
3 0.3 0.8 Spot Truck Cost/ truck $ 200.00 Penalty Cost: $ - 0
4 0.1 0.9
5 0.1 1
ANALYSIS
Question a. How many trucks should Rapid have? Question b. Given Quick's decision, what is Steel's total cost?
Q=
Demand Probability Truck Cost Spot Truck Cost Cost
1 0.2
Smart's Order Probability Revenue Cost to Reserve Profit 2 0.3
1 0.2 3 0.3
2 0.3 4 0.1
3 0.3 5 0.1
4 0.1
5 0.1
Expected profit = Expected Cost=
C_underage
C_overage
Critical Ratio: --> Check against cumulative probability
Have 3 trucks

Transportation c

COORDINATING FREIGHT
DATA Manufacture (Steel) Transporter (Rapid)
Trucks Required Probability Cumulative Probability
1 0.2 0.2 Truck cost: $ 120.00 Truck Reserve Cost: $ 60.00
2 0.3 0.5
3 0.3 0.8 Spot Truck Cost/ truck $ 200.00 Penalty Cost: $ - 0
4 0.1 0.9
5 0.1 1 CONTRACT: Rapid would reserve five trucks each day. For all trucks that Steel uses, Steel would pay Rapid at the rate of $120 per truck. It would cost Rapid $60 per truck to reserve trucks the previous day. If trucks are not used by Steel, Steel would guarantee to pay for up to two trucks that are not used at the rate of $60 per day.
ANALYSIS
Question c. What is the impact of this contract on Rapid's expected profit? Question c. What is the impact of this contract on Steel's expected costs?
Q= 5
Demand Probability Truck Cost Credit pay for Rapid Cost
1 0.2
Smart's Order Probability Revenue Cost to Reserve Credit from Steel Profit 2 0.3
1 0.2 3 0.3
2 0.3 4 0.1
3 0.3 5 0.1
4 0.1
5 0.1
Expected profit = Expected Cost=

Is this contract Pareto improving over the original system? Explain why or why not. Your answer:

Warehousing a

Gizmo I (50 units /day)
Component a Demand (units/day) Shipping Quantity (unit/shipment)
Component a 50 500
Component b 50 500
Gizmo II (50 units /day)
Demand (units/day) Shipping Quantity (unit/shipment)
Component b Component a 50 500
Component b 50 500
Total Supply Chain Cost: /day Holding cost (h) $ 0.50 per component per day
Cycle Stock Costs (hQ/2) In-Transit Inventory Costs (hLD)
Truck capacity (C ) 500 components
Helena Duluth Helena Duluth Truck shipment cost (K) $ 2,500.00 each time
Component a Component a Delivery Lead Time (L) 4 days
Component b Component b
Total Cycle Stock Costs Total Cycle Stock Costs
Transport Cost (KD/Q)
Helena Duluth
Component a
Component b
Total Transport Costs

Helena

Duluth

Austin

Carthage

500 units

500 units

500 units

500units

Warehousing b.

Gizmo I (50 units /day)
Component a Demand (units/day) Shipping Quantity (unit/shipment)
Component a 50
Component b 50
Gizmo II (50 units /day)
Demand (units/day) Shipping Quantity (unit/shipment)
Component b Component a 50
Component b 50
Total Supply Chain Cost: /day Holding cost (h) $ 0.50 per component per day
Cycle Stock Costs (hQ/2) In-Transit Inventory Costs (hLD)
Truck capacity (C ) 1000 components
Helena Duluth Helena Duluth Truck shipment cost (K) $ 3,500.00 each time
Component a Component a Delivery Lead Time (L) 4 days
Component b Component b
Total Cycle Stock Costs Total Cycle Stock Costs
Transport Cost (KD/Q)
Helena Duluth
Component a
Component b
Total Transport Costs

Helena

Duluth

Austin

Carthage

500 units

500 units

500 units

500units