SunnyWorld has seen a huge increase in demand for its latest release, J-1, a solar powered phone
Question:
SunnyWorld has seen a huge increase in demand for its latest release, J-1, a solar powered phone case that can fully charge a mobile in up to 10 minutes. Based on that, they are reviewing their supply chain network. Joseph Parker, the Supply Chain Director, asks a member of his team, Janet Perez, to come up with a first analysis.
SunnyWorld has 1 plant and it serves 6 retailer stores through 3 Warehouses. J-1 cases come in boxes of 100. Janet gathers the data below for her analysis:
Table 1: Monthly demand per retailer store
Retailer Store | Demand (Boxes per month) |
Store 1 | 1770 |
Store 2 | 1230 |
Store 3 | 1060 |
Store 4 | 950 |
Store 5 | 750 |
Store 6 | 600 |
Table 2: Warehouse capacity and distance from the plant
Warehouse | Capacity (boxes per month) | Distance from the plant (Km) |
W-1 | 1500 | 221 |
W-2 | 4500 | 554 |
W-3 | 2500 | 378 |
Table 3: Warehouse's distance from the retailer stores (Km)
Warehouse/Retailer | Store 1 | Store 2 | Store 3 | Store 4 | Store 5 | Store 6 |
W-1 | 202 | 130 | 651 | 1034 | 922 | 858 |
W-2 | 780 | 823 | 213 | 891 | 347 | 772 |
W-3 | 578 | 670 | 907 | 120 | 841 | 423 |
Janet also finds that the cost per kilometer is 0.6 Euros per box of phone cases from the plant to the warehouses, and 1.8 Euros per box of phone cases from the warehouses to the retailers. When gathering data to check the current flow of boxes among plant, warehouses and retailer stores, Janet finds that:
- the monthly demands of retailer store 1, store 2 and store 3 are fully fulfilled by Warehouse W-2;
- the monthly demand of retailer store 4 is fully fulfilled by Warehouse W-1;
- the monthly demands of retailer store 5 and retailer store 6 are fully fulfilled by Warehouse W-3;
- the plant produces only what's demanded every month.
PART 1) Based on this information, what is the current total monthly cost (including inbound and outbound costs)?
PART 2) Janet strongly suspects that the current flow of boxes is not optimized. She wants to present to Mr. Parker the minimum monthly total cost (inbound + outbound costs) for the optimized network. What would that cost be?
PART 3) Joseph informs Janet that SunnyWorld wants to improve its service level by limiting to 775 km the maximum distance from warehouses to retailers.
What is the minimum monthly total cost for the new optimized network (including inbound, outbound)? If there is no feasible solution, enter 0 as the answer.