You are on page 1of 11

Supply Chain Modeling and

Optimization
Homework One
2/19/2013
Amber Readnour

Contents
Problem One: ................................................................................................................................................ 2
Given: ........................................................................................................................................................ 2
Solutions: .................................................................................................................................................. 3
Problem Two: ................................................................................................................................................ 6
Assumptions/Simplifications: ................................................................................................................... 6
Equations: ................................................................................................................................................. 6
Solver Constraints: .................................................................................................................................... 7
Solutions: .................................................................................................................................................. 8
Other Results (Inventory, Backlog, Overtime, Hiring, Laying Off, Capacity):............................................ 9
Cost Analysis: .......................................................................................................................................... 10

Amber Readnour

Supply Chain Modeling and Optimization HW 1

Page |1

Problem One:
After analyzing the given data, it was found that a Seasonal Forecast would fit. The results below
are found by using the Seasonal Forecasting Method.

Given:
Year
2005

2006

2007

2008

2009

Amber Readnour

time
2005
2005.25
2005.5
2005.75
2006
2006.25
2006.5
2006.75
2007
2007.25
2007.5
2007.75
2008
2008.25
2008.5
2008.75
2009
2009.25
2009.5
2009.75

Quarter Demand Black Plastic ('000) Demand Clear Plastic ('000)


1
2250
3200
2
1737
7658
3
2412
4420
4
7269
2384
1
3514
3654
2
2143
8680
3
3459
5695
4
7056
1953
1
4120
4742
2
2766
13673
3
2556
6640
4
8253
2737
1
5491
3486
2
4382
13186
3
4315
5448
4
12035
3485
1
5648
7728
2
3696
16591
3
4843
8236
4
13097
3316

Supply Chain Modeling and Optimization HW 1

Page |2

Solutions:

2010

2011

2012

2010

2011

2012

Amber Readnour

2010
2010.25
2010.5
2010.75
2011
2011.25
2011.5
2011.75
2012
2012.25
2012.5
2012.75

Forcast Black Plastic ('000) Seasonal Index (BP, '000)


6545
0.824916371
4560
0.57478617
5566
0.701487901
15066
1.898809558
7334
0.824916371
5110
0.57478617
6237
0.701487901
16882
1.898809558
8123
0.824916371
5660
0.57478617
6908
0.701487901
18698
1.898809558

2010
2010.25
2010.5
2010.75
2011
2011.25
2011.5
2011.75
2012
2012.25
2012.5
2012.75

Forcast Clear Plastic ('000) Seasonal Index (CP, '000)


6591
0.709002474
17382
1.869959442
9047
0.973240336
4163
0.447797748
7294
0.709002474
19237
1.869959442
10012
0.973240336
4607
0.447797748
7997
0.709002474
21092
1.869959442
10977
0.973240336
5051
0.447797748

Supply Chain Modeling and Optimization HW 1

Page |3

Black Plastic Yearly Average ('000)


8000
7000
6000

y = 956.47x + 2195.4

5000
Yearly Average

4000

Linear (Yearly Average)

3000
2000
1000
0
0

Black Plastic ('000)


18000
16000
14000
12000
10000
Demand
8000

Forcast

6000
4000
2000
0
2004

2005

Amber Readnour

2006

2007

2008

2009

2010

2011

2012

Supply Chain Modeling and Optimization HW 1

2013

2014

Page |4

Clear Plastic Yearly Average ('000)


7000
6000
5000

y = 399.39x + 4330.6

4000
Yearly Average
3000

Linear (Yearly Average)

2000
1000
0
0

Clear Plastic ('000)


25000

20000

15000
Demand
Forcast

10000

5000

0
2004

2005

Amber Readnour

2006

2007

2008

2009

2010

2011

2012

Supply Chain Modeling and Optimization HW 1

2013

2014

Page |5

Problem Two:
Assumptions/Simplifications:

Lowest Inventory Holding Cost: $4 + $10 (using public) +$2 (transportation) = $16/000 lbs
1 unit = 1000 lbs
Backlog = 0 for both sheets and containers
Match Container Production with Demand
Sheet Production must be at least equal to that of Container Production
Combine Clear and Black Plastic, taking into account capacity loss of extruder

Equations:
These equations are set up for the Extruder. If they were to be performed for the Press the
number of workers would change (1 worker per Press) and the capacity would change from 2.85 to 2.
Legend
Symbol/Operator
It
Ot
Ext
Capacity
Reg Time
OT
Ct
# Workers for Extruder

Inventory Balance Equation:

Overtime:

Hiring:
(
(

Description
Inventory
Overtime
Extruders
2.85
Regular Time = 504
Overtime = 60
Capacity
6

)
)

Layoff:
(
(

Amber Readnour

Supply Chain Modeling and Optimization HW 1

Page |6

Capacity:
(
(

) (
) (

)
)

Solver Constraints:

The solver here is trying to minimize the overall cost. So the objective cell was set to minimize
the total cost (Cell $D$46). The variable cells that it was changing was Production, Subcontract, and
Extruders ($D$19: $H$30). The constraints that were set were:

Container Production = Demand ($E$19:$E$30 = $C$19:$C$30)


Number of Extruders 14 ($G$19:$G$30 <= 14)
Number of Presses 25 ($H$19:$H$30 <= 25)
Sheet and Container Backlog must be 0 ($H$19:$L$30 = 0)
Production, Equipment, and Subcontract must 0 ($D$19:$G$30 >= 0)
Production, Equipment, and Subcontract must be an integer ($D$19:$H$30 = integer)
Capacity must 0 ($S$19:$T$30 >= 0)

The excel solver found that a combination of using Public and Private Warehousing was more cost
effective than solely using either public or private warehousing.
Amber Readnour

Supply Chain Modeling and Optimization HW 1

Page |7

Solutions:
Year

Quarter
I
II
III
IV
I
II
III
IV
I
II
III
IV

2010

2011

2012

Production
Subcontract
Sheet
Container
Sheet

Demand
14,112
22,826
15,187
17,841
15,858
25,504
16,947
19,906
17,602
28,182
18,708
21,971

16785
18666
16392
17797
19171
21336
19046
18984
20364
22504
20243
20636

Total Cost
Year
2007

2008

2009

Quarter
I
II
III
IV
I
II
III
IV
I
II
III
IV

985
985
592
561
498
440
373
311
255
198
134
9

$13,117,869

Inventory
Public Warehouse Private Warehouse
Cost
3657.606472
0.0
3,658 Public
482.2149747
0.0
482 Lease
2279.246317
0.0
2,279 Operating
2795.774833
0.0
2,796 Ratio
6606.449826
2,659.0
3,947
2879.110893
0.0
2,879
5351.477917
1,404.0
3,947
4741.295193
793.8
3,947
7758.883102
3,811.4
3,947
2277.968002
0.0
2,278
3947.462072
0.0
3,947
2621.561386
0.0
2,622

Public Cost
Private Cost

$726,385
$628,508

Private storage
Combination Cost

3,947
$512,989

Amber Readnour

14112
22826
15187
17841
15858
25504
16947
19906
17602
28182
18708
21971

Equipment
Extruder
Press
0
0
12
14
12
21
11
15
12
16
13
16
13
23
13
17
13
18
14
18
14
25
14
19
14
19

Supply Chain Modeling and Optimization HW 1

16
4
4
1.2

Page |8

Other Results (Inventory, Backlog, Overtime, Hiring, Laying Off, Capacity):


Inventory
Sheet
Container
0
0
3658
0
482
0
2279
0
2796
0
6606
0
2879
0
5351
0
4741
0
7759
0
2278
0
3947
0
2622
0
Hiring
Extruder Press
70
0
0
6
5
0
0
0
5
0
0
0

Amber Readnour

14
7
0
1
0
7
0
1
0
7
0
1

Backlog
Sheet
Container
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Layoff
Extruder Press
0
0
1
0
0
0
0
0
0
0
0
0

0
0
6
0
0
0
6
0
0
0
6
0

Overtime
Extruder
Press
37
697
0
0
37
796
0
0
89
840
47
185

0
866
0
893
0
1197
0
918
0
1499
0
1169

Capacity
Extruder Press
1881
0
1951
2119
2166
0
2267
2260
2139
0
2260
1867

Supply Chain Modeling and Optimization HW 1

1679
779
1813
124
2031
357
2130
315
2571
0
2650
0

Page |9

Cost Analysis:

Material
Sheet
$176,682
$196,482
$172,548
$187,334
$201,798
$224,593
$200,486
$199,836
$214,361
$236,879
$213,087
$217,225

Subcontract
Sheet
$59,088
$59,088
$35,521
$33,646
$29,870
$26,420
$22,391
$18,684
$15,318
$11,854
$8,053
$525

Regular Time Labor


Extruder
Press
$526,746
$105,833
$526,739
$158,207
$517,643
$113,938
$562,003
$120,407
$602,101
$119,893
$602,100
$173,327
$601,457
$127,858
$599,508
$135,527
$635,036
$135,201
$635,038
$188,879
$635,040
$143,141
$635,040
$147,252

Overtime
Extruder
Press
$4,951
$11
$94,061
$19,482
$0
$0
$0
$20,101
$4,942
$0
$107,518
$26,930
$2
$0
$0
$20,652
$12,071
$0
$113,400
$33,728
$6,332
$0
$24,951
$26,295

Hiring
Layoff
Extruder
Press
Extruder
Press
$174,189 $34,998
$0
$0
$0
$17,319
$3
$0
$0
$0
$3,610 $17,567
$14,669 $2,139
$0
$0
$13,260
$0
$0
$204
$0
$17,670
$0
$0
$0
$0
$255
$18,043
$0
$2,536
$774
$0
$11,749
$0
$0
$129
$1
$17,751
$0
$0
$1
$0
$0
$18,150
$0
$1,359
$0
$0

Total Cost

Amber Readnour

Inventory
Sheet
Container
$58,522
$0
$7,715
$0
$36,468
$0
$44,732
$0
$105,703
$0
$46,066
$0
$85,624
$0
$75,861
$0
$124,142
$0
$36,447
$0
$63,159
$0
$41,945
$0

$13,117,869

Supply Chain Modeling and Optimization HW 1

P a g e | 10

You might also like