![d. Calculate Cycle Inventory and other values (Enter Formulas
for each into Spreadsheet)
e. Graphically show Theia’s Cycle Inventory
2. Develop Software Automation
a. Automate Demand Forecasting in Visual Basic
b. Automate Cycle Inventory in Visual Basic
c. Show simulation of Software Module of Theia Vision’s Cycle
Inventory/Demand Forecasting
3. Develop a Benchmark of SCM against PlantronicsStep 3:
Execute the Plan
Following contents are the plan in execution.[1] - Cycle
Inventory
Advantages/Reasons for Theia Having a Cycle Inventory
· Average amount inventory used to satisfy demand between
shipments → allows Theia to take advantage of economies of
scale
· Allows Theia to minimize total inventory costs
· Theia should keep the cycle inventory as low as possible to
save money on shipping and storage of inventory costs. → key
aspect to maximize profit
· Facilitates the balance of supply and demand for Theia’s
products by allowing SPC to satisfy customer demand based on
forecasts
· Implementing optimal quantity of inventory to receive from
suppliers per each shipment/order allows Theia to minimize
holding cost of inventory and transportation cost
· Overall, having a cycle inventory will allow SPC to reduce
costs, therefore maximizing their profits
Context of Theia’s Supply Chain](https://image.slidesharecdn.com/phase3structuredprobl-221206040449-47ee9e33/85/Phase-3-Structured-Probl-docx-2-320.jpg)
![$300.00
10.00%
$3,000.00
12044
60.2
6022
$180,656.30
1.494551
CSE 171B Cycle Inventory Spreadsheet
· Each time the inventory reaches ROP, ideally there will be a
new shipment of Theia’s Smart Glasses ordered.
· Inventory needs to be replenished approximately every ~1.5
days for Theia’s smart glasses based on forecasted demand in a
year 4.
· The average inventory (cycle inventory) is (rounded)
approximately 6460.3 units of Smart Glasses in year 4 based on
forecasted demand.
· To satisfy annual demand in year 4 of smart glasses Theia
needs about (rounded) 193.81 orders or shipments per year.
Conclusion:
· From our demand forecasting results, the annual demand for
year 4 is estimated to be 2,503,631.0 units.
· We should have 193.81 shipments per year with a cycle
inventory of 12920.6 units (Year 4)
· Costs totaling around $251,032,883.42 (Year 4)
[2] - Software Automation - Demand Forecasting - Product
Cycle Inventory Model - Simulation
1. User enters demand for product](https://image.slidesharecdn.com/phase3structuredprobl-221206040449-47ee9e33/85/Phase-3-Structured-Probl-docx-14-320.jpg)
![2. User clicks buttons “Choose Module”
3. User selects either demand forecasting or inventory
a. If User Selects Demand Forecasting
i. If user selects:
1. Static Forecasting
2. Moving Average (4 Point, 4 Periods into future)
3. Simple Exponential Smoothing
4. Holt’s Method(Not completed)
5. Winter’s Method (Not Completed)
b. If User Selects Inventory (Not completed)
[3] - Benchmarking
Calibrating/Comparing/Contrasting of Theia’s SCM approach
and implementation against Plantronics
Competitive Strategy Comparison (Theia VS. Plantronics)
Context:
Source of Competitive Advantage
Low Cost
Differentiation
Strategic Target
Broad
Cost Leadership
Differentiation (Theia)
Narrow
Focused](https://image.slidesharecdn.com/phase3structuredprobl-221206040449-47ee9e33/85/Phase-3-Structured-Probl-docx-15-320.jpg)
Phase 3 Structured Probl.docx
- 1. Phase 3 Structured Problem Solving ProcessStep 1: Define the Problem 1. Develop/Implement Cycle Inventory 2. Develop software automation a. Demand Forecasting b. Cycle Inventory c. Simulation 3. Create Benchmark of SCM a. PlantronicsStep 2: Create a Plan 1. Develop/Implement Cycle Inventory a. Reasons for Cycle Inventory b. Context of SC Network and SC Stages c. Best forecasted demand
- 2. d. Calculate Cycle Inventory and other values (Enter Formulas for each into Spreadsheet) e. Graphically show Theia’s Cycle Inventory 2. Develop Software Automation a. Automate Demand Forecasting in Visual Basic b. Automate Cycle Inventory in Visual Basic c. Show simulation of Software Module of Theia Vision’s Cycle Inventory/Demand Forecasting 3. Develop a Benchmark of SCM against PlantronicsStep 3: Execute the Plan Following contents are the plan in execution.[1] - Cycle Inventory Advantages/Reasons for Theia Having a Cycle Inventory · Average amount inventory used to satisfy demand between shipments → allows Theia to take advantage of economies of scale · Allows Theia to minimize total inventory costs · Theia should keep the cycle inventory as low as possible to save money on shipping and storage of inventory costs. → key aspect to maximize profit · Facilitates the balance of supply and demand for Theia’s products by allowing SPC to satisfy customer demand based on forecasts · Implementing optimal quantity of inventory to receive from suppliers per each shipment/order allows Theia to minimize holding cost of inventory and transportation cost · Overall, having a cycle inventory will allow SPC to reduce costs, therefore maximizing their profits Context of Theia’s Supply Chain
- 3. Theia’s Supply Chain Network Theia Vision’s Best Forecasted Demand for Year 4 (Winter’s Method) Year Annual Demand Period Forecast 1 578,166 1 15099 2 96110 3 182443 4 284514 2 1,492,695 5 219828
- 5. 15 662682 16 725260 Cycle inventory is the average inventory needed to meet customer demand between the order time and when the supply arrives. Costs are part of the equation due to inventory storage expenses. ⇒ Therefore, we need to know the annual demand of our product as well as the material cost, shipping cost, and holding cost: Demand (D) = Annual demand (obtained through forecasting) Year 4 2,504,131 Smart Glasses Cost (C) = Price paid by the manufacturer to the supplier for 1 unit of supply $300 Inventory holding cost (h%) = cost of holding $1 of inventory for 1 year. 0.1 Fixed Ordering Cost (S) = cost of placing the order and labor for receiving. $3000 Lot Size (Q) = Number of units in 1 lot of shipment (quantity per shipment) QL*= √ QL* = √ QL* =12920.6 The amount Theia should load onto each truck is about 12,920.6 Smart Glasses per shipment to minimize total cost based on forecasted demand for year 4. (Efficiency)
- 6. Cycle Inventory QL* = QL*/2 QL* = 12920.6/2 QL* = 6,460.3 The cycle inventory is about 6,460.3 smart glasses at Theia based on annual forecasted demand for year 4. Explanation ⇒ · Annual Demand obtained from forecasting ⇒ 2,504,131 Smart Glasses · The Unit production cost in financial modeling was based on Google Glasses prices, and other competitors. Our product is projected to be sold for $300 based on the competitors costs and the components pricing. · Various other products were evaluated to come to the conclusion of 10% holding cost. Our product is sold for $300 per unit and costs $30 per unit to hold. (30/300=.10 · Based on trucks shipment costs in general and for other small electronic accessories, it was concluded that the ordering cost would be $3000 per trip.
- 7. Formulas from textbook/lecture placed into spreadsheet to calculate values below Theia Vision: Cycle Inventory Year Period Demand Annual Demand Unit Cost Holding Cost(%) Shipment Cost Optimal Lot Size Number of Shipments Cycle Inventory Cycle Inventory Holding Cost Replenishment Cycle Time Annual Ordering Cost Material Cost Annual Total Cost 1 1 15099 578,166.00 $300.00 10.00% $3,000.00 1738 8.7 869 $26,066.36 10.358179 $295,590.32
- 14. $300.00 10.00% $3,000.00 12044 60.2 6022 $180,656.30 1.494551 CSE 171B Cycle Inventory Spreadsheet · Each time the inventory reaches ROP, ideally there will be a new shipment of Theia’s Smart Glasses ordered. · Inventory needs to be replenished approximately every ~1.5 days for Theia’s smart glasses based on forecasted demand in a year 4. · The average inventory (cycle inventory) is (rounded) approximately 6460.3 units of Smart Glasses in year 4 based on forecasted demand. · To satisfy annual demand in year 4 of smart glasses Theia needs about (rounded) 193.81 orders or shipments per year. Conclusion: · From our demand forecasting results, the annual demand for year 4 is estimated to be 2,503,631.0 units. · We should have 193.81 shipments per year with a cycle inventory of 12920.6 units (Year 4) · Costs totaling around $251,032,883.42 (Year 4) [2] - Software Automation - Demand Forecasting - Product Cycle Inventory Model - Simulation 1. User enters demand for product
- 15. 2. User clicks buttons “Choose Module” 3. User selects either demand forecasting or inventory a. If User Selects Demand Forecasting i. If user selects: 1. Static Forecasting 2. Moving Average (4 Point, 4 Periods into future) 3. Simple Exponential Smoothing 4. Holt’s Method(Not completed) 5. Winter’s Method (Not Completed) b. If User Selects Inventory (Not completed) [3] - Benchmarking Calibrating/Comparing/Contrasting of Theia’s SCM approach and implementation against Plantronics Competitive Strategy Comparison (Theia VS. Plantronics) Context: Source of Competitive Advantage Low Cost Differentiation Strategic Target Broad Cost Leadership Differentiation (Theia) Narrow Focused
- 16. Theia’s Competitive Strategy · Theia Vision has a broad audience of consumers that are primarily focused towards technology savvy individuals and those with visual/hearing impairments. · Customers can purchase Theia Vision from common retailers (Amazon, Walmart, Bestbuy, Target, etc.) and, of course, from our website. · At Theia our business process is focused towards innovation and marketing of our products and features. With customer satisfaction in mind, we are able to offer features that our competitors can’t. · Key business partners include battery suppliers, parts wholesalers, and logistics companies Force Strength Explanation Competitors HIGH Intra-Industry Competition Level is High: Companies are working hard to capitalize on this rapidly growing market. So far, Vuzix’s AR Glasses are considered the top performing AR Glasses. However, their pricing is very steep so we will see how they hold up when the New Entrants come in. New Entrants HIGH Threat Level for New Entrants is High: The barrier to entry is extremely low as we see big companies such as Amazon, Facebook, Microsoft, and most alarmingly, Apple trying to enter this market. Apple and Microsoft are currently in its production stage for AR Glasses with Microsoft’s HoloLens already available for preorder. Suppliers MED Suppliers have Medium Power: as there are only a few businesses in the world that specialize in lens crafting and frame crafting. Luxottica makes glasses frames for virtually,
- 17. most of the frame industry so if we were to use them as our supplier, it would be hard to be in control of the pricing as they are a monopoly within their industry. Buyers Low Consumer Power is Very Low: Since There is insubstantial price differentiation between products, the bargaining power of consumers is low. There are no low-cost providers within this industry and it is unknown if this can even be a possibility at this time, given the technology needed for AR Glasses and our modern environment. Complementors LOW Potential Complements Include: services/features such as the Amazon Alexa, Weather Channel App, and Google/Google Maps. These are three add-ons that could prove to be quite useful in conjunction with AR Glasses. Substitutes LOW Few substitutes including, other smart accessories, (apple watch, etc.) Force Strength Explanation Competitors High Competitors are well established, large players. Consumers trust and go to them for headsets. Large number of competitors New Entrants LOW-MED Few barriers to entry, cost of production is relatively low Suppliers
- 18. LOW Component suppliers are abundant, and global Buyers High Consumers can easily purchase a new product and move on. Complementors LOW Few complementors to headphone (maybe laptop and phone discount deal) Substitutes LOW Few substitutes in headset industry Source of Competitive Advantage Low Cost Differentiation Strategic Target Broad Cost Leadership Differentiated Narrow Focused Plantronics Plantronics Competitive Strategy · Focused Strategy · Headsets are focused toward consumers using gaming consoles, phones, and computers · Plantronics product will satisfy customer needs in these areas · Consumers (entertainment) · Business sector(sales focus on IT departments, help desk etc.) · High quality assurance · Large cost savings on equipment/service fees (Unified
- 19. Communications) · Improved collaboration decreases wasted resources/time to maximize efficiency/profits · Innovative products that perform well · R&D into new product platforms in their focus area Responsiveness/Efficiency Spectrum Highly Efficient SC Somewhat Efficient SC Somewhat Responsive SC Highly Responsive SC Plantronics Theia In terms of where Theia lies in the Responsiveness/Efficiency Spectrum, we would like to be a company with a highly responsive supply chain. Since a portion of our business involves custom glasses for those with visual impairments, it is necessary for us to be able to build a pair of glasses tailored to individuals as well. Our customers shouldn’t have to wait for weeks just to receive a product they ordered online, so to provide the best experience from end to end, we will develop our supply chain to be highly responsive. In comparison, competitors like Vuzix and Google Glass lie more to the left of the spectrum, where Google Glass is somewhat responsive and builds enterprise level glasses for businesses. Vuzix is yet further down, and instead opts for a somewhat efficient supply chain, since their glasses are more for the general consumer “one type fits all” style. Plantronics requires a somewhat Responsive SC, in order to address customers because their products are innovative. Implied Demand Uncertainty Low Uncertainty Somewhat Low Uncertainty Somewhat High Uncertainty
- 20. High Uncertainty Plantronics Theia · High Uncertainty · Theia Vision is a ground breaking, innovative product (Differentiated product strategy) · Market may not initially accept the product (High Uncertainty) · Somewhat High Uncertainty · Plantronics implements new product lines that are innovative · Customer trust in their new lines may cause some uncertaintyTheia/Plantronics Supply Chain Strategy Our product will have a highly responsive SC overall. Meaning that our SC can respond quickly to customer demands with our multiple product lines, large quantities being shipped, short lead times, and high quality of service. Using the Responsiveness vs IDU spectrum allows us to understand our strategic fit and expand the zone to match company goals. Plantronics fits in at a similar position as Theia, because they have somewhat high responsiveness and somewhat high uncertainty. Both Theia Vision and Plantronics Headsets are innovative and require responsiveness in the Supply Chain. Conclusions/Comparisons Between Theia and Plantronics SCM Plantronics’ Global SCM Theia’s SCM · Pull Model (Integrated Networks) · Demand Driven · Global inventory visibility (accurate) · Correct PO Prices, receives acknowledgements and commits from suppliers · Virtual Supply Chain · Higher accuracy shipping dates/time to customers at order
- 21. entry · Faster, more effective, sales, and operations planning process · Decision Based · ‘Lean” Practices · Automate Manual Transactions · Somewhat high uncertainty · Somewhat high responsiveness · High Uncertainty · Theia Vision is a ground breaking, innovative product (Differentiated product strategy) · Market may not initially accept the product (High Uncertainty) · Highly responsive supply chain. · Since a portion of our business involves custom glasses it is necessary for us to be able to build a pair of glasses tailored to individuals as well. · customers shouldn’t have to wait for weeks just to receive a product they ordered online, · Rapid, effective sales/operations · Tracking of product/materials (increase in responsiveness · Demand Driven → inventory based on demand forecasts Step 4: Check The frameworks used are provided in the textbook and in lecture, therefore the information above is correct. The forecasted demand is checked based on calculations by hand and carefully checking the spreadsheet. Our benchmarking comparison takes into account both companies competitive strategies and aligned SC strategy. We provided as much context as possible to complete the assignment. Our software automation modules automates demand forecasting using the moving average method Step 5: Learn & Generalize Based upon research conducted on Plantronic’s supply chain, we can create an effective supply chain for Theia. Plantronics fits in at a similar position as Theia, because they have
- 22. somewhat high responsiveness and somewhat high uncertainty. We decided to create a highly responsive SC overall. Meaning that our SC can respond quickly to customer demands with our multiple product lines. Our cycle inventory above takes into account previous phases financial model and demand forecasting. After completing cycle inventory ITS 835 Chapter 5 ERM in Practice at the University of California Health System Enterprise Risk Management Professor Michael Solomon Introduction • University of California’s ERM • Technology • Premium rebate program • Professional Liability Prescription Program (PLPP) • ERM and the Center for Health Quality and Innovation • Protected health information value estimator • PHIve
- 23. University of California’s ERM • University of California (UC) Health System • Clinics, medical centers, schools • Over 3 million patient visits annually • UC Office of the President’s Office of Risk Services • Responsible for ERM • UC formally adopted COSO Integrated Framework in 1995 • Committee of Sponsoring Organizations Internal Control • Newly hired Chief Risk Officer (CRO) • Experienced in ERM from industry • Key Performance Indicator (KPI) • Critical to ERM foundation Technology • UC’s approach incorporates technology • ERM information system (ERMIS) • Initial phases • Simple risk assessment tools • Dashboards • Control, mitigation, monitoring, survey • Dashboard system • Based on KPIs
- 24. • Visual indicators ERM Process ERMIS Dashboards UC MMR (My Managed Risk) Portal UC’s Approach to Evaluating Incidents, Events, and Claims Premium Rebate Program • Program to reduce frequency and severity of loss • Professional Liability Prescription Program (PLPP) • Encourage risk reduction initiatives • Aimed at reducing cost of risk • Rewards units for implementing effective initiatives • Annual rebates for initiatives that work • Driving concept - Everyone is a risk manager • ERM and the Center for Health Quality and Innovation • Joint venture to award up to $8 million • Reduce risk of clinical harm to UC surgery patients
- 25. PHIve • Personal health information (PHI) • UC asked Bickmore to develop a software tool • Estimates the value of PHI • PHI value estimator (PHIve) • PHIve steps • Process determines the impact of PHI breach • Repercussions • Reputational • Financial • Legal and regulatory • Operational • Clinical Summary • Risk is a part of all organizations • ERM assists organizations in managing all risk • UC deliberately advanced ERM to reduce overall risk • UC Office of Risk management updates risk plans in an ongoing effort • Technology is a cornerstone of UC’s ERM
- 26. ITS 835 Chapter 3 ERM at Mars, Incorporated: ERM for Strategy and Operations Enterprise Risk Management Professor Michael Solomon Introduction • Mars’ ERM history • Phase 1 – Crash and Burn • Phase 2 - Success • Global rollout • Reporting • Operating workshops • Technology • Aggregation • Template evolution • Conclusion Mars’ ERM History • Mars, Incorporated • Privately held -> migration to non-family management
- 27. • Decentralized management • Leadership had legacy commitment to risk management • ERM was viewed as an evolution • COSO versus bespoke approach • COSO – Committee of Sponsoring Organizations structure • Bespoke approach won • Phase 1 • Failed due to being impractical and overly complex • Phase 2 • Simpler and targeted Planning Workshops • Desire to align senior management goals with ERM • Started with simple template • Operating plan initiative sheet • Objective • Score • Risk column • Risk treatment column • Management team met to define and rank • Risks • Risk treatments • Changed label from “mitigations”
- 28. Global Rollout • Used lessons learned from pilot • Each unit has specific nuances • Interviewing GM and CFO together saved subsequent interview time • Workshops helped to identify • Gaps in risk management readiness • High-risk initiatives • Ongoing activities with unexpected high risk Reporting • Color-coding adds • Urgency • Clarity • Groups are defined • Clusters • Score represents • Confidence of meeting goals Reporting, cont’d.
- 29. Reporting, cont’d. Reporting, cont’d. Operating Workshops • Several ongoing changes • Technology • Early-on, process was technology agnostic • Word -> Excel • Excel -> purpose-built software • ERM supports aggregation • More complete view of organizational impact of risk • Continual template evolution • Added risk treatment owners and due dates Summary • Mars received an award for their ERM • Corporate Executive Boards’ “Force of Ideas Award” for ERM • Key factors for ERM success • Alignment with Mars’ principles
- 30. • Focus on meeting objectives • Operational • Strategic • Flexible • Realistic TIM 125 Phase 4 Drone4Life Professor Subhas Desa Group 26 Chelsie Baker Janne Chua Ke Xu Tieshan Zeng Kelly Zheng
- 31. 1.safety inventory 2.design facility network 3.design transportation network 4.safety inventory module 5.transportation module 6.facility module 7.user manual 8. Executive summary 1. Define: · SP1:Make sure that you complete all the tasks that we agreed upon during our Phases 2, project meetings. “Benchmark” (calibrate/compare/contrast) your SCM approach and implementation against Plantronics (see Problem 6 in HW #5). · SP2:Complete your implementation of cycle and safety inventory for your SC network. · SP3:Two important new SCM drivers that you should now work on, while we are covering the material in class, are Facilities and Transportation Network (see “Readings” above). · SP4: Work on implementing the software (Information) automation for your project using Excel and Visual Basic. For example, create and link demand forecasting module, product cycle and safety inventory modules, transportation module and facilities module. · SP5: Attempt to simulate your product’s supply chain and examine various scenarios using your integrated software.
- 32. · SP6: Align and integrate your high-level strategies (from Phases 1, 2) with the detailed implementations of each driver. · SP7: Develop the proper SC management guidelines for your team’s product, as well as a simple user’s manual for your software module. 2. Plan · What information is available for solving the problem? · For SP1-SP7, we have: · Lecture Notes of SCM · Online resources · Notes of Cycle Inventory · Notes of Safety Inventory · Software Integration · SCM drivers · What assumption need to be made to make the solution process manageable? · We have business analysts and data analysts to analyze the problems · Audience: the CEO, CTO and Dev, team. · What analysis needs to be performed to resolve the issues defined in Step 1? · SP1: Complete the benchmark work, comparison with Plantronics · SP2: Indicate the cycle inventory and safety inventory · SP3: Facility and Transportation network · SP4-5: Software Integration and do a lot of scenarios(calculate the value by using the software) · SP6: Align and integrate the high level strategies · SP7: do the SCM guidelines for our products · How can you provide the information? · Bullet points
- 33. · Description · Excel tables · Visual Basic · Calculations From TA: One supplier Transportation Inventory Facilities Cycle calculations Dont calculate all suppliers, select one Select one location Cycle Inventory and Safety Inventory 1. Define: · Indicate the cycle inventory and safety inventory 2. Plan · 3. Execute SP2: Complete your implementation of cycle and safety
- 34. inventory for your SC network. Cycle Inventory for Motor: Use the list of equation to find our cycle inventory amount: Annual Ordering Cost = (D/Q)*S Annual Holding Cost = (Q/2) * hC Optimized lot size = Q* = sqrt(2DS/hC) Number of annual orders = D/Q Total annual Cost = Annual Order Cost + Annual Holding Cost a. Find EOQ(optimal lot size) b. Find number of shipments/year(optimal order frequency) c. Cycle inventory d. Cycle inventory holding cost/Annual holding cost e. Find replenishment cycle time (order frequency) f. Annual Ordering Cost Annual Demand(D) = 18852 Per Unit Cost(C) = $5000 Holding Cost(hC) = 10% = $500 Shipping Cost/Setup Cost/Cost per order (S) = $200 a. Find EOQ(optimal lot size) EOQ = QL* = = = 122.807 b. Find number of shipments/year(optimal order frequency) D/QL* = 18852/122.807 = 153.508 ≈ 153.5 shipments/year c. Cycle inventory QL*/2 = 122.807 /2 = 61.403 ≈ 61.4 units d. Cycle inventory holding cost/Annual holding cost Cycle inventory * hC = 61.4 * 500 = $30701.79 e. Find replenishment cycle time (order frequency) T = 365/n = 365/61.4 ≈ 2.38 days f. Annual Ordering Cost (D/Q) * S = 153.5 * 200 = $30701.79 g. Total Annual Cost: Total annual Cost = Annual Order Cost + Annual Holding Cost = $30701.79 + $30701.79 = $61403.58
- 35. Safety Inventory: Annual demand (Forecasted) = 18852 Average Weekly Demand = 18852/52 = 362.5 Desired CSL (%) = 95 Lead time (weekly) = 0.34 week SS = 1.64 * sqrt(0.34) *362.5 =346.65 ROP = DL + SS = 362.5*0.34 + 346.65 = 469.9 SS=346.65 Q (Items) T (Time) (Weeks) Safety Inventory Model Lead time = 0.3 weeks Lot Size: 122.807 ROP=469.9 Demand: 362.5 Because all of our parts are only required one for each products, so the safety inventory of all the parts are the same.
- 36. SP2: Facility Network Define: · Define the problem: after doing the cycle and safety inventory, two important new elements (SCM drivers) of your project are designing/implementing a Facilities Network Plan: · Process to design the facility network Execute: Each target city are close to the main army base in each state. Step 1: distance between warehouse and demanded army base Target state Richmond Los angeles San Antonio Columbus Phoenix Richmond,VA 0 2234 1263 701 1829 San jose 2873
- 37. 339.8 1692.4 2479.3 710.8 Austin 1471 1378 79.5 1235.2 1005.9 Atlanta 532.5 2183 988 567 1845 San diego 2634.2 120.6 1275.7 2227.2 354 Step 2: The transportation cost = $1.69* miles Step 3: Forecasted demand in each region for Step 4: The Excel sheet for Facility design Conclusion： As shown, the best option is to open the plants in Richmond,
- 38. Austin and San Diego with lowest cost of $23489.7. Transportation Network: Define : Implement process and design for transportation network Plan: the process for transportation network design Execute: Step1: Which mode of transportation should be used ? Total cost =Transportation cost + inventory holding cost Inventory cost = cycle inventory cost + safety inventory costs + in-transit cost Conclusion: The mode of transportation we should use is the Truck because the Truck has the lowest cost than other modes of transportation Step 2 and Step 3: Should inventory be aggregated spatially? Should orders be aggregated in time ? It should be spatially aggregated because it will minimize the total cost and we made a Excel sheet to analyze three different scenarios Conclusion: based on the three scenarios, we should choose the truck as transportation mode and make the number of stocking location as small as possible, because it will save a lot of safety inventory cost. The scenario 3 of truck mode is the best option Step 3: Rank of transportation modes and conclusion:
- 39. User Manual Sheet1: Choose a Module Window: · Demand Forecasting Button: Click to select Forecasting method to perform · Inventory Button: Click to perform Inventory management computations · Transportation Button: Click to perform Transportation management · Facilities Button: Click to perform Facility management Demand Forecasting Module: · Static Forecasting Button: Click to perform Static Forecasting · Moving Average Button: Click to perform Moving Average Forecasting method · Simple Exponential Smoothing Button: Click to perform Simple Exponential Smoothing forecasting method · Holt’s Method Button: Click to perform Holt’s method of forecasting · Winter’s Method Button: Click to perform Winter’s method of forecasting Static, Moving Average, Simple Exponential Smoothing, Holt’s, and Winter’s Forecasting Modules: · Enter the demand data in spreadsheet Sheet1 from A2 to A21 · Click the specific Forecast method button to run the forecast · Back button: Click to finish and get back to sheet1
- 40. Inventory Module: · Enter values required in the textbox then click the “Calculate the cycle inventory” or “Calculate the safety inventory” Button to calculate the accordinate inventory values and create a metrics in spreadsheet · MessageBox pops out “ The values are compute to the spreadsheet” · Close Button: Click to exit Facilities Worksheet: · Solver Button: Click to calculate optimization of facilities