Logistics Scenario

• You are the Vice President of GMC Logistics you have two teams Team #1 Transportation and Team # 2 Logistics (Operations, facilities, Pay, Staff, and employees).
• The truck that your company is using is the Kenworth T680, it gets an average of 8 MPG. It has a150 Gallon Tank. Diesel fuel is currently priced at $5.74 a gallon
• We own 12 tractor and 53' foot trailers. we have 50 employees working for us. 12 Drivers are paid $70K a year. 16 Staff members are paid $45K a year, the CEO makes $125K and VP makes ($90K) a year. 20 Workers are paid hourly at 11.00 and hour working 40 hours a week. Other operational cost is about $97K a year.
• Six 18 wheelers are in excellent condition, 4 are in satisfactory condition (repairs on those tractors are ($50K a year), 2 need to be replaced...three are in the shop now, and one will be out of the shop in two days.
• We just received a contract (we need to negotiate price with at least a 12% profit margin) to move in (30 days) 27K King James Luxury Chairs (KJLC) to Savannah, Georgia (164 miles one way). Each trailer can only hold 200 chairs.
• Profits look satisfactory, GMC Logistics Board only approved $1M dollars to spend for the year (you must divide this by 12 and GMC is already in August and spent $500,127. -Your spending limit is $175K
• You cannot stack KJLC chairs more than two high (they are fragile and expensive).
• Tractor speed to go 300 miles is 60 MPH with (2) two-hour driver rest stops. It takes 3 hours to load the truck full of chairs and once at the final destination it will take three hours to unload each trailer.
• Trucks can only drive speed limit 60mph
• Have to use D.OT truck driving regulation for driving hours allowed which are Drivers must take a 30-minute break when they have driven for a period of 8 cumulative hours without at least a 30-minute interruption and May drive a maximum of 11 hours after 10 consecutive hours off duty. Two drivers can ride in the same truck.
• 27,000 chairs must be transported delivered to savannah each 18 wheeler trailer holds 200 chairs

Answer the following questions?

(a) How much is fuel to transport KJLC Chairs(27000 of them)?

(b) What teams does what?

(c ) Horizontal (Contract) or vertical (Channel) Functions or a combination of both?

(d ) how much does GMC L & T ask for in this KJLC contract to cover that month's expenses with at least a 12% profit margin?

(e) How many trucks and trailers can do the job within the time afforded? Or is there a counter proposal?

(f) At what rate do you want KJLCs to enter GMC L & T distribution center (s) to be processed then transported?

The CEO approached the Vice President, and she was excited about receiving another transportation contract paying big money, without thinking, she accepted and told the V.P "to make it happen". So, 5 days into transporting KJLCs, The V.P. must divert 4 tractors and trailers to handle another job lasting 15 days. The V.P. smiled and knew adjustments must be made...

BTW 10 days in, two truck drivers tested positive for COVID-19 and must be quarantined...

1. What is the objective?

2. How do we plan?, using what plans?

3. How is effective performance measured? with what metrics?

4. How do GMC Logistics and Transportation manage/prioritize demands simultaneously being agile?

5. What did we learn? We can put what into our historical data?