OMGT2287 Supply Chain Modelling and Design Assessment 1: Case Study
Details
The company produces navels at three plants, which can be delivered directly to the two customers or it can first be shipped to the two warehouses and then to the customers. Shipments between plants are allowed. This also applies to between warehouses and between customers.
The cost of producing the navels is the same at each plant; as a result, the company is only concerned with minimising the total shipping cost incurred in meeting customer demands. The production capacity of each plant (in tons per year) and the customer demand are summarised in the table below:
Plant Capacity
Plant 1 400
Plant 2 375
Plant 3 350
Customer Demand
Customer 1 500
Customer 2 450
The cost (in thousands of dollars) of shipping a ton of the product between each pair of locations is listed in the table below where a blank indicates that the company cannot ship on that route:
From node To node
Plant 1 Plant 2 Plant 3 Warehouse 1 Warehouse 2 Customer 1 Customer 2
Plant 1 1 1 6 7 15 15
Plant 2 1 1 5 6 16 16
Plant 3 1 1 7 6 14 15
Warehouse 1 3 6 8
Warehouse 2 3 7 7
Customer 1 2
Customer 2 2
The management has set the maximum flow between nodes (in tons) as shown in the table below:charteredessay.com/omgt2287-
From node To node
Plant 1 Plant 2 Plant 3 Warehouse 1 Warehouse 2 Customer 1 Customer 2
Plant 1 200 200 250 250 200 200
Plant 2 200 200 250 250 200 200
Plant 3 200 200 250 250 200 200
Warehouse 1 250 250 250
Warehouse 2 250 250 250
Customer 1 200
Customer 2 200
Since sometimes the demands are fluctuated, the company plans to have safety stock of 100 tons at Warehouse 1 and 50 tons at Warehouse 2. The company wants to determine a minimum-cost shipping strategy.
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