Supply Chain Management:
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Case Study Suppose that you are the consultant hired by a manufacturing company to design a suitable inventory management strategy for its Alloy #1 products for determining the weekly production schedule. Alloy #1 products are the products with the highest priority and they can be produced using either make-to-order or make-to-stock approach. The typical production process is as follows:--- Raw material Feedstock Products The weekly production schedule specifies the production quantities of products and feedstocks that the company has to produce every week. After discussing with the production staff about the product hierarchy, you have compiled the following information about the products. Question 2 Suppose that the lead time required for producing the 6 products from 1mm feedstock follows the probability distribution below. Probability Lead time required for producing feedstock from raw material (week) 12 22 0.062 0.90 0.02 0.022 32 42 Discuss how to design a good inventory control policy for the products made from 1mm feedstock to meet a target service level of 95% with order fulfilment time of not more than 2 weeks. Feedstock Unit value ($/kg) Lead time required for producing feedstock from raw material (weeks) 1mm Sheet 450 22 3mm Plate 350 22 6mm Plate 250 22 100mm Bare 1502 24 Feedstock Products (Materials) Unit product Yield from Lead time from value ($/kg) feedstock to feedstock to product (%) product (weeks) 800 80 2e 1mm Sheet 1001 80 2 1002 1003 800 800 80 2 1011e 800 80- 2 1023 800 802 2e 1032 800 80 2e 3mm Plate 1004 80 2e 700 700 1008 80 2 1009 700 80 2e 1010 700 80 2e 1018 700 80 2e 1019 700 802 2e 1021 700 80 2e 1027 700 802 2e 1033 700 80 2e 1035 700 80 2e 6mm Plate 1006 600 80- 2e 1007 600 80- 2 1012 600 802 2e 1013 600- 80 2e 1022 600 802 2e 1024 600 80 2e 80 2e 1036 1037 600 600 600 80 2 1005 80 2 1014 600 802 2 600 80 2e 1015 1016 1017 80 2e 80 2 1020 600 600 600 600 600 80 2e 1025 80 2 1026 80 2 1028 600 80- 2e 1034 600 80- 2 1030 600 802 2e 600 80 2e 1031 1029 100mm Bare 450 90 2e Product Jan Feb Mare Jule Auge Sep 0 0 0 56 576 611 0 0 287 584 1,263 0 Sales Kgs per month Apre May Jun 20 0 179 41 204 812 617 969 167 1,917 803 0 560 572 321 5- 17 143 359 377 276 909 404 0 0 0 2- 0 0- 191 146 101 122 54 1,079 8 0 1001 1002 1003 1004 1005 1006 1007 1008 1009 1010- 1011 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 1023 1024 117 486 275 183 1,188 90- 0 770 581 263 686 126 1,590 32 191 614 102 1,215 32 0 0 0 0 0 0 129 8 422 45 1,020 432 0 690 177 119 1,017 450 414 98 360 54 290 17 35 752 0- 54 558 230 0 174 12- 26 176 246 92 849 0 0 0- 0 27 0 41 11 0- 0- 0 0 51 171 20- 263 68 0- 101 0- 321 0- 0- 618 228 1,100 6 0 3 0 8 0 44 0- 0- 0 15 45 12 0 0 323 0- 0 0 0- 0 0 0 02 0 33 12 0 0 0 0 0 3 12 0 0 0- 0- 0 0 04 0 0 8 0 0 0 27 99- OM 0 0 375 33 0 0 0 35 0 0 0 0 0- 0 0 0 495 0 0 12 0 0 0 0- 0- 0- 0- 0- 18 0 0- 0 0 48 0 57 15 14 0 0 0 105 189 0 0 0 0 0 33 14 24 0 0 0 0 366 0 0- 0- 0- 0 0 0 02 0- 0 1025 1026 1027 1028 1029 1030 1031 1032 1033 1034 1035 1036 1037 0 0- 0- 0- 293 538 0 0- 174 452 0 0 15 0 0 0- 0 409 17 0- 0- 0 0 0 0 0 0 93 538 18- 0- 12 0- 0- 2 0 0- 0- 0 0 0 0- 20 57 0 23 02 0 ET 0 04 0 02 0- d 0- 02 33 Case Study Suppose that you are the consultant hired by a manufacturing company to design a suitable inventory management strategy for its Alloy #1 products for determining the weekly production schedule. Alloy #1 products are the products with the highest priority and they can be produced using either make-to-order or make-to-stock approach. The typical production process is as follows:--- Raw material Feedstock Products The weekly production schedule specifies the production quantities of products and feedstocks that the company has to produce every week. After discussing with the production staff about the product hierarchy, you have compiled the following information about the products. Question 2 Suppose that the lead time required for producing the 6 products from 1mm feedstock follows the probability distribution below. Probability Lead time required for producing feedstock from raw material (week) 12 22 0.062 0.90 0.02 0.022 32 42 Discuss how to design a good inventory control policy for the products made from 1mm feedstock to meet a target service level of 95% with order fulfilment time of not more than 2 weeks. Feedstock Unit value ($/kg) Lead time required for producing feedstock from raw material (weeks) 1mm Sheet 450 22 3mm Plate 350 22 6mm Plate 250 22 100mm Bare 1502 24 Feedstock Products (Materials) Unit product Yield from Lead time from value ($/kg) feedstock to feedstock to product (%) product (weeks) 800 80 2e 1mm Sheet 1001 80 2 1002 1003 800 800 80 2 1011e 800 80- 2 1023 800 802 2e 1032 800 80 2e 3mm Plate 1004 80 2e 700 700 1008 80 2 1009 700 80 2e 1010 700 80 2e 1018 700 80 2e 1019 700 802 2e 1021 700 80 2e 1027 700 802 2e 1033 700 80 2e 1035 700 80 2e 6mm Plate 1006 600 80- 2e 1007 600 80- 2 1012 600 802 2e 1013 600- 80 2e 1022 600 802 2e 1024 600 80 2e 80 2e 1036 1037 600 600 600 80 2 1005 80 2 1014 600 802 2 600 80 2e 1015 1016 1017 80 2e 80 2 1020 600 600 600 600 600 80 2e 1025 80 2 1026 80 2 1028 600 80- 2e 1034 600 80- 2 1030 600 802 2e 600 80 2e 1031 1029 100mm Bare 450 90 2e Product Jan Feb Mare Jule Auge Sep 0 0 0 56 576 611 0 0 287 584 1,263 0 Sales Kgs per month Apre May Jun 20 0 179 41 204 812 617 969 167 1,917 803 0 560 572 321 5- 17 143 359 377 276 909 404 0 0 0 2- 0 0- 191 146 101 122 54 1,079 8 0 1001 1002 1003 1004 1005 1006 1007 1008 1009 1010- 1011 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 1023 1024 117 486 275 183 1,188 90- 0 770 581 263 686 126 1,590 32 191 614 102 1,215 32 0 0 0 0 0 0 129 8 422 45 1,020 432 0 690 177 119 1,017 450 414 98 360 54 290 17 35 752 0- 54 558 230 0 174 12- 26 176 246 92 849 0 0 0- 0 27 0 41 11 0- 0- 0 0 51 171 20- 263 68 0- 101 0- 321 0- 0- 618 228 1,100 6 0 3 0 8 0 44 0- 0- 0 15 45 12 0 0 323 0- 0 0 0- 0 0 0 02 0 33 12 0 0 0 0 0 3 12 0 0 0- 0- 0 0 04 0 0 8 0 0 0 27 99- OM 0 0 375 33 0 0 0 35 0 0 0 0 0- 0 0 0 495 0 0 12 0 0 0 0- 0- 0- 0- 0- 18 0 0- 0 0 48 0 57 15 14 0 0 0 105 189 0 0 0 0 0 33 14 24 0 0 0 0 366 0 0- 0- 0- 0 0 0 02 0- 0 1025 1026 1027 1028 1029 1030 1031 1032 1033 1034 1035 1036 1037 0 0- 0- 0- 293 538 0 0- 174 452 0 0 15 0 0 0- 0 409 17 0- 0- 0 0 0 0 0 0 93 538 18- 0- 12 0- 0- 2 0 0- 0- 0 0 0 0- 20 57 0 23 02 0 ET 0 04 0 02 0- d 0- 02 33
