0 22 23 24 25 26 27 28 29 30 31 A THASLAM Warehouse 1 22 4 SATBOUFFRES SPANNING 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Totals B SCM 573 Logistics, Distribution and Network Management Exam 1 Part B VOLUNTEERS APPLE GROWERS INC. Average Warehouse Sales $21,136,032 $16,174,988 $78,559,012 $17,102,486 $78,226,672 $40,884,400 $43,105,917 $47,136,632 $24,745,328 $57,789,509 $16,483,970 $26,368,290 $6,812,207 $28,368,270 $28,356,369 $62,697,015 $47,412,142 $25,832,337 $75,266,622 $16,403,349 $2,586,217 $44,503,623 $22,617,380 $4,230,491 $832,799,258 Average Inventory Level $3,217,790 $2,196,364 $26,510,027 $2,085,246 . $26,443,489 $5,293,539 $6,542,079 $8,722,640 $2,641,138 $12,103,076 $1,991,016 $2,719,330 $1,241,921 $3,473,799 $4,166,288 $13,449,058 $7,412,573 $3,599,421 $23,523,846 $2,009,402 $504,355 $6,580,183 $3,001,390 $796,669 $170,224,639 Turnover Ratio 6.57 7.36 2.96 8.20 2.96 7.72 6.59 5.40 9.37 4.77 8.28 9.70 5.49 8.17 6.81 4.66 6.40 7.18 3.20 8.16 5.13 6.76 7.54 5.31 2 AR 3 4 5 6 7 18 19 23 24 Totals Average Turnover 50 51 52 53 54 55 56 67 Part A Part B $22,617,380 $4,230,491 $832,799,258 Warehouse 13, 21, & 24 Total Sales for Warehouses 13, 21, 24? Avg Inventory (actual)? Expected Average Inventory (regression)? Expected Average Inventory (Sq Root Law)? Warehouse 19 Total Sales for Warehouse 19? Avg Inventory (actual)? Avg Expected Inventory (regression)? Allocate #19 Inventory to New Warehouse New Warehouse 19a (40%) ? New Warehouse 19b (60 %)? Total? Expected Average Inventory (Sq Root Law)? $796,669 $170,224,639 Before Consolidation $13,628,915 $2,542,945 Before Expansion $75,266,622 $23,523,846 $3,525,278 5.31 6,45 After Consolidation $13,628,915 $359,890 $1,796,133,65 After Expansion: Sales fter Expansion: Exp Avg Inv $30,106,649 $45,159,973 $75,266,622 $9.409,538 $14,114,308 $23,523,846 Think about and explain how a centralized network with fewer warehouses and a decentralized network with more warehouses impacts both customer service and inventory carrying cost for the supply chain. Using the data from the calculations above, briefly answer each of the questions below: 1. (5 points) Based on the turn-over ratio, what observations can you make? Which warehouses require a more in-depth analysis? 2. (10 points) Based on the regression model, what observation can you make? How might the use of actual data affect centralization or decentralization decisions for this network? 3. (15 points) Based on your calculations in Part A, answer the following questions: a. Why were Warehouses 13, 21, and 24 selected for consolidation? b. Should Warehouse 8 have been included in the consolidation? Why or why not? Is the average inventory level after consolidation what you would expect to see from consolidation? c. d. Which estimate of the average inventory level, the regression model or the Square Root Law, would be a better predictor for the impact of centralization for this network? Why? e. How does a centralized network with fewer warehouses impact both customer service and inventory carrying costs for the supply chain? 4. (15 points) Based on your calculations in Part B, answer the following questions: a. Are the calculations for the expected average inventory levels for 19a and 196 what you would expect? Why or why not? b. How does the total expected inventory level of the 2-warehouse system compare with the baseline for Warehouse 19 (before decentralization)? What might account for the difference? c. How does the total expected inventory level of the 2-warehouse system compare with the Square Root Law calculation? What might account for the difference? d. How does a decentralized network with more warehouses impact both customer service and inventory carrying costs for the supply chain? 5. (5 points) What are the advantages and disadvantages of using the square root heuristic compared to using actual data? 0 22 23 24 25 26 27 28 29 30 31 A THASLAM Warehouse 1 22 4 SATBOUFFRES SPANNING 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Totals B SCM 573 Logistics, Distribution and Network Management Exam 1 Part B VOLUNTEERS APPLE GROWERS INC. Average Warehouse Sales $21,136,032 $16,174,988 $78,559,012 $17,102,486 $78,226,672 $40,884,400 $43,105,917 $47,136,632 $24,745,328 $57,789,509 $16,483,970 $26,368,290 $6,812,207 $28,368,270 $28,356,369 $62,697,015 $47,412,142 $25,832,337 $75,266,622 $16,403,349 $2,586,217 $44,503,623 $22,617,380 $4,230,491 $832,799,258 Average Inventory Level $3,217,790 $2,196,364 $26,510,027 $2,085,246 . $26,443,489 $5,293,539 $6,542,079 $8,722,640 $2,641,138 $12,103,076 $1,991,016 $2,719,330 $1,241,921 $3,473,799 $4,166,288 $13,449,058 $7,412,573 $3,599,421 $23,523,846 $2,009,402 $504,355 $6,580,183 $3,001,390 $796,669 $170,224,639 Turnover Ratio 6.57 7.36 2.96 8.20 2.96 7.72 6.59 5.40 9.37 4.77 8.28 9.70 5.49 8.17 6.81 4.66 6.40 7.18 3.20 8.16 5.13 6.76 7.54 5.31 2 AR 3 4 5 6 7 18 19 23 24 Totals Average Turnover 50 51 52 53 54 55 56 67 Part A Part B $22,617,380 $4,230,491 $832,799,258 Warehouse 13, 21, & 24 Total Sales for Warehouses 13, 21, 24? Avg Inventory (actual)? Expected Average Inventory (regression)? Expected Average Inventory (Sq Root Law)? Warehouse 19 Total Sales for Warehouse 19? Avg Inventory (actual)? Avg Expected Inventory (regression)? Allocate #19 Inventory to New Warehouse New Warehouse 19a (40%) ? New Warehouse 19b (60 %)? Total? Expected Average Inventory (Sq Root Law)? $796,669 $170,224,639 Before Consolidation $13,628,915 $2,542,945 Before Expansion $75,266,622 $23,523,846 $3,525,278 5.31 6,45 After Consolidation $13,628,915 $359,890 $1,796,133,65 After Expansion: Sales fter Expansion: Exp Avg Inv $30,106,649 $45,159,973 $75,266,622 $9.409,538 $14,114,308 $23,523,846 Think about and explain how a centralized network with fewer warehouses and a decentralized network with more warehouses impacts both customer service and inventory carrying cost for the supply chain. Using the data from the calculations above, briefly answer each of the questions below: 1. (5 points) Based on the turn-over ratio, what observations can you make? Which warehouses require a more in-depth analysis? 2. (10 points) Based on the regression model, what observation can you make? How might the use of actual data affect centralization or decentralization decisions for this network? 3. (15 points) Based on your calculations in Part A, answer the following questions: a. Why were Warehouses 13, 21, and 24 selected for consolidation? b. Should Warehouse 8 have been included in the consolidation? Why or why not? Is the average inventory level after consolidation what you would expect to see from consolidation? c. d. Which estimate of the average inventory level, the regression model or the Square Root Law, would be a better predictor for the impact of centralization for this network? Why? e. How does a centralized network with fewer warehouses impact both customer service and inventory carrying costs for the supply chain? 4. (15 points) Based on your calculations in Part B, answer the following questions: a. Are the calculations for the expected average inventory levels for 19a and 196 what you would expect? Why or why not? b. How does the total expected inventory level of the 2-warehouse system compare with the baseline for Warehouse 19 (before decentralization)? What might account for the difference? c. How does the total expected inventory level of the 2-warehouse system compare with the Square Root Law calculation? What might account for the difference? d. How does a decentralized network with more warehouses impact both customer service and inventory carrying costs for the supply chain? 5. (5 points) What are the advantages and disadvantages of using the square root heuristic compared to using actual data