![F −1 =
s .65 38.317 22.756s = 1 × 1 × √2 = 3
The formula for Re-order point, ROP is
OP sR = DL + s
53.269 106.54DL = DW × L = 5 × 2 = 1
OP 106.54 22.756 429.29R = 1 + 3 = 1
Standard deviation of demand during L periods = 38.317
95.61√2 × 1 = 1
Level of safety inventory,
SC − 22.756[1 s( )] 95.61 s( )E = 3 − F 195.61
322.756 + 1 × F 195.61
138.317
SC − 22.756[1 s(1.65)] 95.61 s(1.65) E = 3 − F + 1 × F
SC − 22.756[1 .95] 95.61 .95E = 3 − 0 + 1 × 0
SC − 22.756[1 .95] 95.61 .95 69.692E = 3 − 0 + 1 × 0 = 1
Fill rate = 90.9%1858.06 69.692)/1858.06 9085 F r = ( − 1 = .
=
Average inventory = /2 = 929.03 units858.06 1
Average flow time = = / (2 * 553.269) = 1.68 days858.06 1
3. Create a diagram that shows all the relevant quantities from
part (b).
4. In general, is the demand during the lead-time greater than or](https://image.slidesharecdn.com/toprepareforthisassignmentreviewthisweekslearningres-221012014905-11046b9e/85/To-prepare-for-this-Assignment-Review-this-week-s-Learning-Res-docx-48-320.jpg)
![2006
I
17
5648
6490
II
18
3696
6688
III
19
4843
IV
20
13097
Forecasting using Holt’s Method
We now forecast demand using Level and Trend corrected
exponential smoothing. The assumption is that the data has
level, L, and trend, T, only. Process:
Step 1: Regress the given data to compute the initial values of
the level, L0, and initial trend T0. Forecast, F1 = L0 +T0.
Step 2: Adapt Use two smoothing constants, α=0.06 and β=0.06,
to smooth respectively level and trend. L1 = αD1 + (1-α) [L0
+T0], T1 = β [L1 – L0] +(1-β) T0, Forecast, F2 = L1 +T1
Step 3: Forecast. Ft+1 = Lt +Tt, Lt+1 = αDt+1 + (1-α) [Lt +Tt],
Tt+1 = β [Lt+1 – Lt] +(1-β) Tt
In order to obtain L0 and T0, I graphed the Demand for black
plastic and obtained the slope of the functions as L0= 2042.8
and T0=286.61](https://image.slidesharecdn.com/toprepareforthisassignmentreviewthisweekslearningres-221012014905-11046b9e/85/To-prepare-for-this-Assignment-Review-this-week-s-Learning-Res-docx-115-320.jpg)
To prepare for this Assignment· Review this week’s Learning Res.docx
- 1. To prepare for this Assignment: · Review this week’s Learning Resources. Consider how to assess and treat clients requiring bipolar therapy. The Assignment Examine Case Study: An Asian American Woman With Bipolar Disorder. You will be asked to make three decisions concerning the medication to prescribe to this client. Be sure to consider factors that might impact the client’s pharmacokinetic and pharmacodynamic processes. At each decision point stop to complete the following: · Decision #1 · Which decision did you select? · Why did you select this decision? Support your response with evidence and references to the Learning Resources. · What were you hoping to achieve by making this decision? Support your response with evidence and references to the Learning Resources. · Explain any difference between what you expected to achieve with Decision #1 and the results of the decision. Why were they different? · Decision #2 · Why did you select this decision? Support your response with evidence and references to the Learning Resources. · What were you hoping to achieve by making this decision? Support your response with evidence and references to the Learning Resources. · Explain any difference between what you expected to achieve with Decision #2 and the results of the decision. Why were they different? · Decision #3 · Why did you select this decision? Support your response with evidence and references to the Learning Resources. · What were you hoping to achieve by making this decision? Support your response with evidence and references to the
- 2. Learning Resources. · Explain any difference between what you expected to achieve with Decision #3 and the results of the decision. Why were they different? Also include how ethical considerations might impact your treatment plan and communication with clients. 1 Shridhik John CSE 171B S. Desa Final Examination PROBLEM 1: PLANNING Activity Matrix: A B C D E F G A A B X B C X X C D X X D E X X E F X X F X G
- 3. *Waterfall Method Key A – Problem 2: SCM Design/Analysis Framework B – Problem 3: Optimal Lot Size and Cycle Inventory for SPC C – Problem 4: Safety Inventory for Polystyrene Resin at SPC D – Problem 5: Sourcing for SPC E – Problem 6: Transportation Design for SPC F – Problem7: Execution of your plan G – Extra Credit 2 GANTT Chart:
- 4. PERT Chart: CPM: A à B à C à D à E à F à G PROBLEM 2: SCM DESIGN/ANALYSIS FRAMEWORK Step One: Define the Problem You have been hired as a consultant by Poly (formerly Plantronics), a medium-sized company “headquartered” in Santa Cruz, which is the world leader in communication head-sets. You have been asked to design their supply chain all the way from “high-level” concerns (e.g., competitive strategy, “alignment”), through analysis/procedures (e.g., inventory management models) to the actual integrated software that will be used to manage their Supply Chain. Describe the high-level framework (process) for performing supply chain management from strategy to planning to operations for a typical high-tech product.
- 5. A B C D E F G Ta sk 1 2 3 4 5 Days A B C D E F G 3 Create appropriate diagrams to help them visualize the structure of your framework and associated procedures.
- 6. Step Two: Treatment Plan Information Available: Ø Lecture Notes Ø SCM, C&M Ø Online Resources Assumptions: Ø I will be assuming the role of a supply chain analyst for Plantronics. Plan: 1) Assess the high-level framework for performing SCM 2) Draw diagrams that explain this framework Step Three: Execute the Plan There are many key features and functions of the high-level framework for performing supply chain management. We can split this framework up into three key parts: strategy, planning, and operations, in which we will assess the SC strategy, the four key drivers (inventory, facilities, transportation, and information) and demand forecasting. Strategy: To develop a SC strategy, we must follow a 3-step process. The first step includes understanding the customer’s needs, determining where the product lies in its market life cycle, and determining the product’s IDU and placing it on the IDU spectrum. IDU, or implied demand uncertainty, refers to the uncertainty in demand for the product
- 7. implied by the customer need for the product during its life-cycle. Poly, being a medium-sized communication head-set company, will have a somewhat high IDU since it creates new models of existing products. The second step is to establish the corresponding competitive strategy for the given product and to determine and map the trade-off between responsiveness and efficiency for the product based on the competitive strategy. Responsiveness refers to the ability of the SC to respond rapidly to a variety of customer demands and efficiency refers to the cost of making, storing, and delivering Low IDU Somewhat Low IDU Somewhat High IDU High IDU Plantronics IDU Spectrum 4 the product to the customer. In any supply chain, increasing
- 8. responsiveness decreased efficiency and vice versa. We must map this trade-off with a responsiveness/efficiency spectrum. The third and final step of developing a SC strategy is to create a 2-D space where the IDU spectrum is the x-axis and the responsiveness/efficiency spectrum is the y-axis where we define a zone of strategic fit and position the SC strategy for the product at the appropriate location in the zone of strategic fit. It is important to expand the zone of strategic fit to include all of the organizational functions in the company for all stages in the supply chain. Highly Efficient Somewhat Efficient Somewhat Responsive Highly Responsive Plantronics Responsiveness/Efficiency Spectrum High Resp/
- 9. Low Eff Plantronics Low Resp/ High Eff Resp/Eff IDU Low IDU High IDU Zone of Strategic Fit 5 Planning: / number. Cycle inventory management refers the calculating the optimal value of the lot size (amount of good in each order between two adjacent stages of the supply chain), given the annual demand, in order to minimize the sum of the annual material, shipping, and inventory holding costs. There are many metrics that are important to calculate such as the flow time, the average amount of time that one unit of supply is held in inventory, shipment frequency, and more. Operations: In a supply chain, the operations refer to safety inventory management and transportation between facilities. Safety inventory is the additional inventory held in order to meet excess demand in the case that actual demand exceeds the forecasted demand. In analyzing
- 10. safety inventory, it is important to set up a re-order point, or the time to place another order when a certain level of inventory is reached. Other important metrics include the cycle service level (CSL) which denotes the fraction of replenishment cycles for which the item is expected to be in stock and the fill rate (fr), which is the fraction of customer demand that can be fulfilled from available inventory during each replenishment cycle. In terms of facilities, a company must determine the role, location, and capacity of the facility in order to minimize total cost, or in other words, maximize SC efficiency. For transportation, the mode of transportation to minimize total cost and the level of aggregation must be determined. It is also crucial that the company has a strong IT Infrastructure that allows for simple and efficient communication. Overall, we can demonstrate this framework with the following diagram: Step Four: Check your Work
- 11. The work I have conducted is correct in every detail, as I have successfully answered the question using information about the high-level framework for Determine Competitive Strategy and Customer Needs Determine SC Performance (responsiveness/ efficiency) and IDU Demand Forecasting Optimization of Four Key Drivers Inventory Management Facilities Transportation IT Infrastructure 6 performing supply chain management using information from the lectures and the textbook. My assumptions are reasonable, and in terms of what I know the results make sense.
- 12. Step Five: Learn and Generalize I have solidified my understanding of the process for performing supply chain management. I have recognized that there are three main parts: strategy, planning, and operations, as well as the importance of demand forecasting and the four key drivers. My assumptions have not affected my results and I believe my results are good enough the act on. PROBLEM 3: Optimal Lot Size and Cycle Inventory for SPC Step One: Define the Problem Specialty Packaging Corporation (SPC) buys polystyrene resin from a supplier in 1000-pound units, and each unit costs $20.00, and the percent holding cost is 12% (changed from 10%). The fixed shipping cost per order is $300 and we can assume that 1000 pounds of resin yields 1000 pounds of clear plastic. Calculate the optimal lot size and the required cycle inventory for polystyrene resin. Step Two: Treatment Plan Information Available: Ø Lecture Notes Ø SCM, C&M Ø SPC Cast Study (from the midterm)
- 13. Assumptions: Ø I will be assuming the role of a supply chain analyst for SPC. Ø I will be using my forecasted demand for 2007 (36,594) from the Midterm as the annual demand for polystyrene resin Plan: 1) Review lecture notes/textbook for information on optimal lot size/cycle inventory 2) Use appropriate equations to calculate optimal lot size and cycle inventory Step Three: Execute the Plan 7 D (Annual Demand) = 28770 S(Set up cost) = $300 d1 = 1000 pound units h (holding cost per year) = 20% C(unit cost) = $25
- 14. Optimal Lot Size: Plugging in our values for each variable, we then get: �"∗ = 2 28770 300 0.20 25 = 1858.06 = 1859 ����� Now that we have calculated our optimal lot size, we can calculate safety inventory using the following equation: ����� ��������� = 1859 2 = 929.5 = 930 ����� Percent Holding Cost of 10% (Midterm) Percent Holding Cost of 12% (Final) Optimal Lot Size, �"∗ 2,164 units 1859 units Cycle Inventory 1,082 units 930 units Step Four: Check your Work
- 15. The work I have conducted is correct in every detail since I have used the correct data and the formulas shown in class and in the textbook. My assumptions are reasonable, and in terms of what I know the results make sense. Step Five: Learn and Generalize 8 By increasing the percent holding cost, we can see that the optimal lot size and cycle inventory decrease. This makes sense because in our equation for determining optimal lot size, the percent holding cost is on the denominator, so dividing by a larger number will lead to a smaller result. Cycle inventory is simply half of the optimal lot size, so obviously this will follow the same pattern. My assumption to use my forecasted demand form the Midterm has affected the quantities calculated, and I believe my results are good enough to act on. PROBLEM 4: SAFETY INVENTORY FOR POLYSTYRENE RESIN AT SPC Step One: Define the Problem Subproblem 1: Why should SPC have a safety inventory? What is the average weekly demand for black plastic (and therefore polystyrene resin) for 2007? If
- 16. the coefficient of variation (cv) for black plastic is 0.25, what is the standard deviation in the weekly demand? Subproblem 2: The polystyrene supplier has a lead-time of 2 weeks. SPC would like its Cycle Service Level (CSL) to be 0.95. Determine the necessary safety inventory (safety stock) level for polystyrene resin for a continuous replenishment policy? What is the re-order point (ROP)? What is the fill rate? What is the average inventory? What is the average flow time? Subproblem 3: Create a diagram that shows all the relevant quantities from part (b). Subproblem 4: In general, is the demand during the lead-time greater than or less than the lot size? Explain your answer with the help of the diagram from part (c). Step Two: Treatment Plan Information Available: Ø Lecture Notes Ø SCM, C&M Ø SPC Cast Study (from the midterm) Assumptions: Ø I will be assuming the role of a supply chain analyst for SPC. Ø I will be using my forecasted demand for 2007 (36,594) from the Midterm as the annual
- 17. demand for polystyrene resin Ø I will be using my results from Problem 3 for all calculations Plan: 1) Review lecture notes and the textbook for information on safety inventory 2) Determine why SPC should have a safety inventory 3) Use the given information and appropriate equations to calculate the desired quantities 4) Create a diagram to show all relevant quantities 9 Step Three: Execute the Plan Subproblem 1: Safety Inventory, Weekly Demand, Coefficient Variation SPC should have a safety inventory in the event that the actual demand exceeds the predicted/forecasted demand. It is crucial that SPC hold additional inventory to meet this potential excess in demand so that they do not forego any sales and maximize revenue. The average weekly demand for clear plastic for 2007 can be found by dividing the annual demand (which was found using Winter’s Model on the Midterm) by the number of weeks in a year, 52.
- 18. ������� ������ ������, �G = � 52 = 28770 52 = 553.269 �����/���� Now that we have found our average weekly demand, we can calculate the standard deviation in the weekly demand. Since we know that the cv for clear plastic is 0.20, we can use the following equation: �� = �G �G 0.25 = �G 553.269 �G = 553 ∗ 0.25 = 138.317.8 = 139 ����� Subproblem 2: Safety Stock Quantities: We are given the following information:
- 19. Lead-Time (L) 2 weeks CSL 0.95 Average Weekly Demand (Dw) 553 units Standard Deviation in Weekly Demand (�G) 139 units Safety Stock (ss): The first step is to calculate the standard deviation of the average weekly demand in terms of the lead-time. Optimal Lot Size: 10 = L∗ LM,NLO PQRST∗ $NOO (.LO)LW = 1,875 units Next, we will use the following equation, in which we use the standard deviation found above, desired CSL, and the NORMSINV function to determine the necessary level of safety stock. �� = �TYZ ��� ∗ �" �� = �TYZ 0.95 ∗ 197
- 20. �� = 1.65 ∗ 197 = 325.05 = 325 ����� Re-Order Point (ROP): Now that we have calculated the necessary level of safety stock, we can calculate the ROP. The first step is to calculate the average demand based on the lead- time. �" = � ∗ �G �" = 2 ∗ 553 = 1106 ����� Then, we can use the following equation to calculate ROP: ��� = �" + �� ��� = 1106 + 325 = 1431 ����� Fill Rate (fr): To calculate fill rate, we must first calculate the expected shortage per replenishment cycle (ESC) using the following equation: ��� = −�� 1 − �T �� �" + �"�T �� �" ��� = −325 1 − �T 325
- 21. 197 + 197 ∗ �T 325 197 ��� = −325 1 − 0.96 + 197 ∗ 0.086 ��� = −325 ∗ 0.04 + 197 ∗ 0.086 ��� = 3.942 Now that we have our ESC and we know QL = 1875 from the Midterm, we can calculate fill rate. �� = �" − ��� �" 11 �� = 197 − 3.942 197 = 0.979 = 97.9% Average Inventory: The average inventory is simply the sum of the cycle inventory
- 22. and safety stock. We know the cycle inventory is 938 units from the Midterm and the safety stock is 325 units, we get: ������� ��������� = ����� ��������� + �� ������� ��������� = 938 + 325 = 1263 ����� Average Flow Time: To calculate the average flow time, we must first calculate the average flow rate which is equal to the daily demand: ������� ���� ���� ����� ������ = �G 7 = 553 7 = 79 = 79 ������� ���� ���� = ������� ��������� ������� ���� ���� ������� ���� ���� = 1263 79 = 15.9 = 16 ����
- 23. Subproblem 3: Diagram of Quantities Lot Size (Q) 1875 units Cycle Inventory 938 units Weekly Demand (Dw) 553 units Daily Demand (DD) 79 units Standard Deviation in Weekly Demand (��) 139 units Lead-Time (L) 2 weeks Demand During Lead-Time (DL) 1,408 units Standard Deviation During Lead Time (σL) 197 units Expected Shortage per Replenishment Cycle (ESC) 3.942 Safety Stock (ss) 325 units Re-Order Point (ROP) 1431 units Fill Rate (fr) 97.9% 12
- 24. Average Inventory 1,263 units Average Flow Time 16 days Subproblem 4: Demand during Lead-Time vs. Lot Size According to the table above, we can see that the demand during the lead-time (DL), at 1,408 units, is much smaller than the lot size of 1,875 units. This makes sense since SPC will not be able to get more product for about 2 weeks, so it is important that they order more than the expected demand for those 2 weeks at a time. In other words, the lot size must be able to meet expected demand. Step Four: Check your Work I have checked my work by double checking all calculations with Excel and by ensuring that I used the correct formulas for each quantity. My assumptions are reasonable, and in terms of what I know the results make sense. Step Five: Learn and Generalize I have furthered my understanding of calculating safety stock, ROP, fill rate, average inventory, and average flow time. I have also learned how to use Excel to help with these calculations. Since I have used data from my Midterm, my results might vary
- 25. from other students due to differing previous calculations. However, I believe that my results are correct and good enough to act on. PROBLEM 5: SOURCING FOR SPC Step One: Define the Problem Subproblem 1: Which supplier should Julie choose, based on minimizing total cost, if her inventory holding cost h=0.12 and her desired target CSL = 96%. Subproblem 2: Create a supplier scorecard that Julie can use to compare different suppliers. Step Two: Treatment Plan Information Available: Ø Lecture Notes Ø SCM, C&M Ø SPC Cast Study (from the Midterm) 13 Assumptions: Ø I will be assuming the role of a supply chain analyst for SPC. Ø I will be using my forecasted demand for 2007 (36,594) from
- 26. the Midterm as the annual demand for polystyrene resin Plan: 1) Read the first four sections on “Sourcing Decision in a Supply Chain” from the textbook 2) Calculate the total costs for each supplier 3) Determine which supplier Julie should choose 4) Create a supplier scorecard that Julie can use to compare different suppliers Step Three: Execute the Plan Supplier Information: Supplier 1 Supplier 2 Unit Cost (C) $20/unit $15/unit Average Lead Time (L) 1 week 2 weeks Standard Deviation of Lead Time (σL) 0.5 week 1 week Lot Size (QL) 3,000 units 5,000 units We also know the following: Annual Demand (D) 28770 units Weekly Demand (Dw) 553
- 27. Standard Deviation of Weekly Demand (σw) 139 Holding Cost (h) 0.20 CSL 0.96 Subproblem 1: Determine Cheapest Supplier Now, we will calculate the total costs of each supplier to determine which one Julie should choose. Supplier 1 Supplier 2 Annual Material Cost = D*C 28770 *20 = $575,400 28770 *15 = $431,550 14 Cycle Inventory = ij L 3000 2 = 1,500 5000 2 = 2,500 Annual Cost of Holding Inventory = hC*ij
- 28. L 0.20*20*1000 = $4,000 0.12*15*2000 = $6000 Std. Dev. of Demand during Lead Time = σw*σL 139*0.5 = 69.5 units 139*1 = 139 units Safety Inventory = ��kL + �GL�"L ∗ 1.75 (CSL = 96%) 1 ∗ 139L + 553L 0.5L ∗ 1.75 = 540.79 units 2 ∗ 139L + 553L 1L ∗ 1.75 = 1,026 units Annual Cost of Holding Safety Inventory = ss*hC 325*0.20*20 = $1300 325*0.20*15 = $975 Annual Supplier Cost = CM+CI 575,400+4000+1300 = $580700
- 29. 431550+6000+1026 = $438576 Final Decision: Upon completing these calculations, we can see that Supplier 1 has an annual supplier cost of $580700 and Supplier 2 has an annual supplier cost of $438576, so we can conclude that Julie should choose Supplier 2. Subproblem 2: Supplier Scorecard Julie can use the following scorecard to compare different suppliers. Category Weight (1-5) Metric Unit Cost 4 USD Average Lead Time 4 Weeks Lot Size 3 Units Shipping Cost 3 USD Quality 4 N/A Step Four: Check Your Work I have checked my work and ensured that all of my calculations and answers are correct in every detail. I have computed all calculations twice to ensure the right numbers were used. My
- 30. assumptions are reasonable, and in terms of what I know the results make sense. Step Five: Learn and Generalize 15 I have learned how to compare different suppliers to determine which one will minimize total cost. I also learned what a supplier scorecard is and how it can be used to help with sourcing. My results have not been affected by my assumptions, and I believe my results are good enough to act on. PROBLEM 6: TRANSPORTATION DESIGN FOR SPC Step One: Define the Problem Subproblem 1: Create the appropriate table in Excel for comparing rail versus truck delivery options for modes of transportation for transporting polystyrene resin from the PR supplier to SPC. Subproblem 2: Use the table from (a) to select the optimal mode of transportation. Provide quantitative evidence to support your selection. (Make the appropriate assumptions about transportation and other costs.)
- 31. Step Two: Treatment Plan Information Available: Ø Lecture Notes Ø SCM, C&M Assumptions: Ø I will be assuming the role of a supply chain analyst for SPC Plan: 1) Read the section on “Trade-offs in Transportation design” 2) Create a table in Excel that compares rail versus truck delivery options 3) Use the table to select the optimal mode of transportation and provide quantitative evidence to support your selection Step Three: Execute the Plan Subproblem 1: Rail vs. Truck Delivery The mode of transportation decision affects the cycle inventory, safety inventory, and in-transit inventory for SPC. Therefore, we must evaluate the total transportation and inventory cost for each transportation options. We will now compute all necessary quantities using the following equations in Excel: Cycle Inventory = i
- 32. L 16 Safety Inventory = " L ���� �� ������ In-Transit Inventory = � ∗ lmnT RQ SomQTRS NpW Total Average Inventory = Cycle Inventory + Safety Inventory + In-Transit Inventory Annual holding Cost = Total Average Inventory * hC Annual Transportation Cost = D * Transportation Cost per unit Total Annual Cost for Inventory and Transportation = Annual Holding Cost + Annual Transportation Cost Rail transit time = 5 Rail replenish lead time = supplier lead time + Rail transit time = 14 + 5 = 19 Truck transit time = 3 days Truck replenish lead time = supplier lead time + Truck transit time = 14 + 3 = 17
- 33. Hypothesized Lot Size = 4,000 Using Excel to compute these equations, we get: 17 Subproblem 2: Decision According to the spreadsheet above, we can see that the total transportation cost for rail is $1,882,785.70 while the transportation cost of trucks are $2,169,539.84, so we can conclude that the optimal mode of transportation is rail. Step Four: Check your Work I have checked my work to the best of my ability by ensuring that I used the correct equations and by computing all calculations twice. My assumptions are reasonable, and in terms of what I know my results make sense. Step Five: Learn and Generalize I have learned how to determine which mode of transportation minimizes the total inventory and
- 34. transportation cost. In the case of SPC, we can see that their supply chain would be more profitable if they use rail as their mode of transportation as opposed to trucks. My assumptions have not affected my results, and I believe my results are good enough to act on. PROBLEM 7: EXECUTION OF YOUR PLAN Step 1: Define the Problem: Use a table to compare your plan from Problem 1 (column 1) with its execution (column 2). Indicate the reasons for the difference between the plan and its execution (column 3). Add 18 additional columns to capture recommendations for improved execution of your plans in the future. Write down three key lessons you learned in this course. Step 2: Treatment Plan Make a table, and write three notes Step 4: Execute
- 35. Original Plan Actual Execution Reason for Difference Ways to Improve Problem 2: 1 Hour 1.5 Hours Initially misinterpreted the question Understand the question completely before attempting Problem 3: 0.5 Hours 0.5 Hours N/A N/A Problem 4: 1 Hour 2 Hours Had to spend time reviewing equations; typing equations into Word Memorize the equations throughout the quarter Problem 5: 1.5 Hours 1.5 Hours N/A N/A Problem 6: 1.5 Hours 2 Hours Was unfamiliar with how to compare transportation costs Read textbook ahead
- 36. of time Problem 8: 2 Hours 2 Hours N/A N/A Extra Credit: 1 Hour 1 Hour N/A N/A 19 THREE KEY LESSONS 1. Supply Chain Management is a long process that is very equation heavy. I should remember to save these formulas for future reference 2. There are multiple ways to go about transportation and setting up a supply chain system. It is always best to look for the most efficient opportunity available. 3. Your company can either be highly responsive, or highly efficient, it’s hard to be both. Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes Learn and Generalize: It’s always important to track of progress. This exam was a really good practice at helping me understand the material, as well as a solid example of how I
- 37. should pace my work. Despite all the difficulties this quarter threw at us, I hope I will get a solid grades on this. CSE 171B/270B, MOT II: FINAL EXAMINATION S. Desa, CSE 171B207B Final Author: Zhaowei Gu Students Identification Number: 1523932 Institution: University of California Santa Cruz Instructor: S. Desa. 02/17/2020 1. Planning (5 points) Define the Problem: Create a plan and time schedule for completing the final exam. Use an appropriate table (see Problem 7 below) to track how well you execute your
- 38. schedule and make notes on any obstacles and problems you encounter. Plan the treatment of the problem: 1. Create a project plan 2. Finished problem 6 below Execute the plan: Project Plan Status Thursday, 12 March 2020 Receive the Final Examination, read through it and ask questions if needed. ✅ Friday, 13 March 2020 Start on Question 1 & 7 ✅ Saturday, 14 March 2020 Start and finish on Question 2 & 3 ✅ Sunday, 15 March 2020 Start on Question 4 & 5 ✅ Monday, 16 March 2020 Finish on Question 4 & 5 Start on Question 6 ✅ Tuesday, 17 March 2020 Due Date 5 PM Finish on Question 6 Finish Question 1 & 7 Double-check the works
- 39. ✅ PROBLEM 2: SCM DESIGN/ANALYSIS FRAMEWORK (1.0 HOUR, 10 POINTS) Define the Problem: You have been hired as a consultant by Poly (formerly Plantronics), a medium-sized company “headquartered” in Santa Cruz, which is the world leader in communication headsets. You have been asked to design their supply chain all the way from “high-level” concerns (e.g., competitive strategy, “alignment”), through analysis/procedures (e.g., inventory management models) to the actual integrated software that will be used to manage their Supply Chain. Before you start, Poly has asked you to do the following: a) Describe the high-level framework (process) for performing supply chain management from strategy to planning to operations for a typical high-tech product. b) Create appropriate diagrams to help them visualize the structure of your framework and associated procedures. Plan the treatment of the problem: 1. Answer Q#1
- 40. 2. Answer Q#2 Execute the plan: 1. Describe the high-level framework (process) for performing supply chain management from strategy to planning to operations for a typical high-tech product 1. Create a Competitive Strategy: Figure out the competitive strategy that would be the best fit based on other players’ strategies. 2. Create a Product Development Strategy: a. Figure out the product development strategy that would be the best fit the company 3. Supply Chain Strategy: a. Define the SC strategy, to be aligned with the competitive strategy b. Design the supply chain to properly meet objectives for managing inventory, facilities, transportation, and easy communication of information. c. Determine the position on the IDU (Implied demand uncertainty) spectrum d. Map the SC strategy onto a responsiveness spectrum e. Determine where the company is located in the zone of strategic fit and
- 41. figure out how the company can expand the scope of strategic fit across the entire supply chain f. Determine the SC tradeoff between cost and responsiveness 4. Market Strategy (Demand Forecasting): a. Gather demand data from the market analysis and cash-flow analysis b. Perform demand forecasting using the static method to compute initial estimates of the level, trend, and seasonality c. Develop a product life-cycle model to determine where the company should lie in the zone of strategic fit d. Perform demand forecasting using Moving Average, Simple Exponential Smoothing, Holt’s Model, and Winter’s Model. e. Plot the data f. Determine which forecasting method is the best forecasting method 5. Inventory Management (Cycle Inventory) a. Determine the optimal lot size and the optimal shipping frequency b. Determine the lowest inventory size (safety inventory) that can be stocked for cost efficiency c. Use aggregation to determine various costs. Use various
- 42. kinds of aggregation such as simple aggregation and tailored aggregation for best results. 6. Transportation a. Determine which mode of transportation minimizes total cost by different modes of transportation b. Understand the best placement of facilities to reduce transportation costs to customers c. Explore tailed transportation by customer density and distance as well as by-product demand and value 2. Create appropriate diagrams to help them visualize the structure of your framework and associated procedures. 1. Create Porter’s fix (six) model to get a better view of the market. (associated with competitive strategy) 2. Determine the Plantronics competitive strategy.
- 43. 3. Create an Efficiency/Responsiveness, IDU and strategic fit diagram, product life cycle diagram 4. Creating a cycle inventory diagram to visualize when Plantronics should re-order for new stock. Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes I checked all the work I did, they’re all perfectly done. Learn and Generalize: I learned how to properly go through the process of approaching a supply chain network.
- 44. PROBLEM 3: OPTIMAL LOT SIZE AND CYCLE INVENTORY FOR SPECIALTY PACKAGING COMPANY (SPC) (0.5 HOURS, 10 POINTS) Define the Problem: If, in Problem 4 of the midterm, the holding cost h = 0.20 (rather than h = 0.15), what is optimal lot size and the required cycle inventory for polystyrene resin? Use these new numerical values in the problems below. Plan the treatment of the problem: Go back to the midterm and recalculate the optimal lot size and required cycle inventory for black plastic for new holding cost h = 0.2 Execute the plan: Go back to the midterm and recalculate the optimal lot size and required cycle inventory for black plastic for new holding cost h = 0.2 D (Annual Demand) = 28770 S(Set up cost) = $300 d1 = 1000 pound units h (holding cost per year) = 20% C(unit cost) = $25 Optimal lot size: 858.06 units/shipments Q*L = √ hC2DS = √ 0.2×252×28770×300 = 1 Cycle inventory: 29.03 units2 Q*L = 2
- 45. 1858.06 = 9 Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes I checked all the work I did, they’re all perfectly done. Learn and Generalize: I have a better understanding of how to calculate economic order quality, optimal lot size, and cycle inventory. PROBLEM 4: SAFETY INVENTORY FOR POLYSTYRENE RESIN AT SPC (1 HOUR, 20 POINTS) Define the Problem: Use the results from Problem 3 for all calculations. Answer the following questions about safety inventory for polystyrene resin at SPC: a) Why should SPC have a safety inventory? What is the average weekly demand for black plastic (and therefore polystyrene resin) for 2007? If the coefficient of variation (cv) for black plastic is 0.25, what is the standard deviation in the weekly
- 46. demand? b) The polystyrene supplier has a lead-time of 2 weeks. SPC would like its Cycle Service Level (CSL) to be 0.95. Determine the necessary safety inventory (safety stock) level for polystyrene resin for a continuous replenishment policy. What is the Re-order Point (ROP)? What is the fill rate? What is the average inventory? What is the average flow time? c) Create a diagram that shows all the relevant quantities from part (b). d) In general, is the demand during the lead-time greater than or less than the lot size? Explain your answer with the help of the diagram from part (c). Plan the treatment of the problem: 1. Answer Q#1 2. Answer Q#2 3. Answer Q#3 4. Answer Q#4 Execute the plan: 1. Why should SPC have a safety inventory? What is the average weekly demand for black plastic (and therefore polystyrene resin) for 2007? If the coefficient of variation (cv) for black plastic is 0.25, what is the standard deviation in the weekly demand? D (Annual Demand) = 28770 The reason why SPC should have safety inventory is that when
- 47. consumer’s present demand that exceeds the forecasted demand it can help prevents the product shortage. The average weekly demand for black plastic is, (52 weeks in a year)DW = 52 annual demand 53.269 units/weekDW = 52 28770 = 5 The standard deviation of weekly demand with a coefficient variance of 0.25 w 0.25 53.269 .25 38.317units/week= D * = 5 × 0 = 1 2. The polystyrene supplier has a lead-time of 2 weeks. SPC would like its Cycle Service Level (CSL) to be 0.95. Determine the necessary safety inventory (safety stock) level for polystyrene resin for a continuous replenishment policy. What is the Re-order Point (ROP)? What is the fill rate? What is the average inventory? What is the average flow time? Given Data: Average weekly demand, DW = 553.269 units Standard deviation of weekly demand, = 138.317 Lead time, L = 2 weeks CSL = 0.95 QL* = 1858.06 From the sheet of the statistical table, we know that 1.65s (0.95)
- 48. F −1 = s .65 38.317 22.756s = 1 × 1 × √2 = 3 The formula for Re-order point, ROP is OP sR = DL + s 53.269 106.54DL = DW × L = 5 × 2 = 1 OP 106.54 22.756 429.29R = 1 + 3 = 1 Standard deviation of demand during L periods = 38.317 95.61√2 × 1 = 1 Level of safety inventory, SC − 22.756[1 s( )] 95.61 s( )E = 3 − F 195.61 322.756 + 1 × F 195.61 138.317 SC − 22.756[1 s(1.65)] 95.61 s(1.65) E = 3 − F + 1 × F SC − 22.756[1 .95] 95.61 .95E = 3 − 0 + 1 × 0 SC − 22.756[1 .95] 95.61 .95 69.692E = 3 − 0 + 1 × 0 = 1 Fill rate = 90.9%1858.06 69.692)/1858.06 9085 F r = ( − 1 = . = Average inventory = /2 = 929.03 units858.06 1 Average flow time = = / (2 * 553.269) = 1.68 days858.06 1 3. Create a diagram that shows all the relevant quantities from part (b). 4. In general, is the demand during the lead-time greater than or
- 49. less than the lot size? Explain your answer with the help of the diagram from part (c). Based on the result I got, we can see the demand during the lead-time is less than the lot size which 553 < 1858. And the demand during the lead-time suppose to be less than the lot size because then that will avoid the backlog. Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes I checked all the work I did, they’re all perfectly done. Learn and Generalize: I learned how inventory cycling works and different equivalent terms. I have learned the data correlates to reorder point. I have better understand how to calculate economic order quality, optimal lot size, and total inventory costs. PROBLEM 5: SOURCING FOR SPC (0.5-1.0 HOUR FOR READING; 0.5-1 HOUR TO SOLVE THE PROBLEM; 25 POINTS) Define the Problem: Read the first four sections on “Sourcing Decisions in a Supply Chain” from the textbook (Sections 14.1-14.4 Third Edition/Fourth Edition). Use the
- 50. results from Problem 3 for all calculations. Julie Williams needs to make a choice between the following 2 suppliers of polystyrene resin: ● Supplier 1 : unit cost = $20 per unit (1 unit =1000lb.); average lead time= 1 week; standard deviation of lead time = 0.5 week; Batch or lot size =3000 units ● Supplier 2 : unit cost = $15 per unit (1 unit =1000lb.); average lead time= 2 weeks; standard deviation of lead time = 1 week; Batch or lot size = 5000 units Answer the following questions: a) Which supplier should Julie choose, based on minimizing total cost, if her inventory holding cost h = 0.20 and her desired target CSL = 95%? b) Create a supplier scorecard that Julie can use to compare different suppliers. (Hint: Use the Utility Function approach developed in CSE 171A/270A for choosing between alternatives, as well as ideas from the text.) Plan the treatment of the problem: 1. Answer Q#1 2. Answer Q#2 Execute the plan:
- 51. Given Data: Average weekly demand, DW = 553.269 units Holding cost = 0.2 CSL = 0.95 Supplier 1: unit cost = $20 per unit (1 unit =1000lb.); average lead time= 1 week; standard deviation of lead time = 0.5 week; Batch or lot size =3000 units Supplier 2: unit cost = $15 per unit (1 unit =1000lb.); average lead time= 2 weeks; standard deviation of lead time = 1 week; Batch or lot size = 5000 units Standard deviation of weekly demand, = 138.317 Equation: ● Annual material cost = demand * 52 * selling price ● Average cycle inventory = lot size / 2 ● Annual cost of holding cycle inventory = Average cycle inventory * sell price * holding cost ● Standard deviation of demand during lead time = SQRT(avg lead time * St.d of demand * avg cycle inventory * St.d of lead time) ● Safety inventory required with current supplier = Fs^- 1(CSL)* standard deviation of demand during lead time ● Annual cost of holding safety inventory = safety inventory required with current
- 52. supplier * sell price * holding cost 1. Supplier 1: ● Annual material cost = demand * 52 * selling price = 553.269 * 52 * 20 = $575400 ● Average cycle inventory = lot size / 2 = 3000/2 = 1500 ● Annual cost of holding cycle inventory = Average cycle inventory * sell price * holding cost = 1500 * 20 * 0.2 = $6000 ● Standard deviation of demand during lead time = SQRT(avg lead time * St.d of demand + avg cycle inventory * St.d of lead time) = √1 38.317 000 .5× 1 + 1 × 0 =25.26 ● Safety inventory required with current supplier = Fs^- 1(CSL)* standard deviation of demand during lead time = 1.65 * 25.26 = 41.69 ● Annual cost of holding safety inventory = safety inventory required with current supplier * sell price * holding cost = 41.69 *20 *0.2 = $166.75 ● Annual cost of using current supplier = 575400 + 6000 + 166.75 = $581567 Supplier 2: ● Annual material cost = demand * 52 * selling price = 553.269 * 52 * 15 = $431550 ● Average cycle inventory = lot size / 2 = 5000/2 = 2500 ● Annual cost of holding cycle inventory = Average cycle
- 53. inventory * sell price * holding cost = 2500 * 15 * 0.2 = $7500 ● Standard deviation of demand during lead time = SQRT(avg lead time * St.d of demand + avg cycle inventory * St.d of lead time) = =52.69√2 38.317 500× 1 + 2 × 1 ● Safety inventory required with current supplier = Fs^- 1(CSL)* standard deviation of demand during lead time = 1.65 *52.69 = 86.945 ● Annual cost of holding safety inventory = safety inventory required with current supplier * sell price * holding cost = 52.69 * 15 * 0.2 = $158.08 ● Annual cost of using current supplier = 431550 + 7500 + 158.08 = $439208 Based on the calculation, we can see that taking supplier 2’s option is the most cost-efficient choice. 2. Create a supplier scorecard that Julie can use to compare different suppliers. Data Supplier 1 Supplier 2 Weekly Demand 553.269 553.269 Holding Cost 0.2 0.2
- 54. CSL 0.95 0.95 Selling Price 20 15 Average Lead Time 1 2 Standard Deviation of Lead Time 0.5 1 Batch or lot size 3000 5000 Annual Material Cost 575400 431550 Average cycle Inventory 1500 2500 Annual cost of holding cycle inventory 6000 7500 Standard deviation of demand during lead time 25.26 52.69 Safety inventory required with current supplier 41.69 86.945 Annual cost of holding safety inventory 166.75 158.08 Annual cost of using current supplier 581567 439208 Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes
- 55. I checked all the work I did, they’re all perfectly done. Learn and Generalize: Through this problem, I have a better understanding of how to dissect and provide a company’s supply chain strategy and its characteristics to better aid me in the practice of this method on my project. PROBLEM 6: TRANSPORTATION DESIGN FOR SPC (1-1.5 HOURS; 25 POINTS) Define the Problem: Read the section on “Trade-offs in Transportation design” from the textbook (Section 13.5 in Third Edition/Fourth Edition) Answer the following questions about transportation design for transporting polystyrene resin (PR) from the PR supplier to SPC: a) Create the appropriate table in Excel for comparing rail versus truck delivery options for modes of transportation. b) Use the table from (a) to select the optimal mode of transportation. Provide quantitative evidence to support your selection. (Make the appropriate assumptions about transportation and other costs). Plan the treatment of the problem: 1. Finish Q#1 2. Finish Q#2
- 56. Execute the plan: 1. Create the appropriate table in Excel for comparing rail versus truck delivery options for modes of transportation. Rail: Replenishment lead time, L= 7 days + 5 days = 12 days Holding cost = $12 x 0.12 = 1.44 Cycle inventory = Q/2 = 2,000/2 = 1,000 units Safety Inventory = L/2 days of demand = (12/2)(37808.5/365) = 621.51 units In-Transit Inventory = 37808.5(5/365) = 517.925 units Total average inventory = 1,000 + 517.925 + 621.51 = 2139.435 units Annual Holding Cost = 2139.435x 1.44 = $3080.79 Annual transportation cost = 37808.5 x 6.5 = $245755.25 Total annual cost = $245755.25 + $3080.79= 248836.04 Truck: Replenishment lead time, L= 7 days + 3 days = 10 days Holding cost = $10 x 0.12 = 1.2 Cycle inventory = Q/2 = 2,000/2 = 1,000 units Safety Inventory = L/2 days of demand = (10/2)(37808.5/365) = 517.925units In-Transit Inventory = 31,292(3/365) = 310.75 units Total average inventory = 1,000 + 517.925+ 310.75 = 1828.675 units Annual Holding Cost = 1685.85753425 x 1.5 = $2743.01 Annual transportation cost = 37808.5 x 7.5 = $283563.75 Total annual cost = $2743.01 + $283563.75 = $286306.76
- 57. 2. Use the table from (a) to select the optimal mode of transportation. Provide quantitative evidence to support your selection. (Make the appropriate assumptions about transportation and other costs). Based on the result I got, to minimizes the cost we should select Rail transportation because it has lower cost compared to Truck Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes I checked all the work I did, they’re all perfectly done. Learn and Generalize: It was a good review of calculating all the cost factor comparisons to pick the most optimal transportation for the lost pricing. PROBLEM 7: EXECUTION OF YOUR PLAN (0.5 HOURS, 5 POINTS) Define the Problem:
- 58. Use a table to compare your plan from Problem 1 (column 1) with its execution (column 2). Indicate the reasons for the difference between the plan and its execution (column 3). Add additional columns to capture recommendations for improved execution of your plans in the future. Write down three key lessons you learned in this course. Plan the treatment of the problem: Make a table Column 1: Problem 1 plan Column 2: Problem 1 plan execution date Column 3: the reason why there is a difference Column 4: What I have learned Execute the plan: Problem 1 plan Execution date Reason for difference what I have learned Receive the Final Examination, read through it and ask questions if needed. Thursday, 12 March 2020 No difference, plan was well executed, and work was done accurately
- 59. No improvements needed because everything went as planned. Start on Question 1 & 7 Friday, 13 March 2020 This problem is pretty straight forward, I have completed this on time No improvements needed because everything went as planned. Start and finish on Question 2 & 3 Saturday, 14 March 2020 A lot to be done, took me around 5 hr, then I took a break from it. It was a really good practice and I have a better understanding after finish this problem sets.
- 60. Start on Question 4 & 5 Sunday, 15 March 2020 Took a long time for me to figure out the equations and numbers I had some problem with the calculation part and was not be able to finish in one day because I was really busy Finish on Question 4 & 5 Start on Question 6 Monday, 16 March 2020 No difference No improvements needed because everything went as planned. Due Date 5 PM Finish on Question 6 Finish Question 1 & 7 Double-check the
- 61. works Tuesday, 17 March 2020 Took longer than what I thought took some time and got some ideas how to do the Q#6 and finally finish it in 2 hours. Check your work: Is the work correctly in every detail? Yes Are the assumptions/planning reasonable? Yes Does the result make sense? Yes Learn and Generalize: It’s always important to keep tracking the work progress. This exam was a really good practice and I have a better understanding after finish this problem sets. I had some problems with the calculation part and was not be able to finish the problem in one day because I was really busy Really hard final weeks, hopefully I will get good grades on this. For this exam, from my experience, before I am able to handle the time very well, I know which part I need to spend more time on.
- 62. General Instructions (applicable to all problems) · All work on examination must be completely your own, except for research that must be properly attributed and cited. You must not receive any help from anyone or give any help to anyone while doing this examination. · Be sure to use and document a structured problem-solving approach, and create tables, diagrams, and graphs where appropriate. In particular, the plan or approach to solve the problem must clearly and explicitly document all steps and equations used.Reading (0.5 hours) Review your solution to the midterm. Correct all mistakes and omissions on your midterm. You will need some of the results from midterm in the problems below. On each problem below, if you use the results from midterm, then clearly state which results are been used and the numerical values. Problem 1: Planning (0.5 hours, 5 points) Create a plan and time-schedule for completing the final exam. Use an appropriate table (see Problem 7 below) to track how well you execute your schedule and make notes on any obstacles and problems you encounter.Problem 2: SCM Design/Analysis Framework (1.0 hour, 10 points) You have been hired as a consultant by Poly (formerly Plantronics), a medium-sized company “headquartered” in Santa Cruz, which is the world leader in communication head-sets. You have been asked to design their supply chain all the way from “high-level” concerns (e.g., competitive strategy, “alignment”), through analysis/procedures (e.g., inventory management models) to the actual integrated software that will be used to manage their Supply Chain. Before you start, Poly has asked you to do the following: a) Describe the high-level framework (process) for performing supply chain management from strategy to planning to operations for a typical high-tech product. b) Create appropriate diagrams to help them visualize the
- 63. structure of your framework and associated procedures. Problem 3: Optimal Lot Size and Cycle Inventory for Specialty Packaging Company (SPC) (0.5 hours, 10 points) If, in Problem 4 of the midterm, the holding cost h = 0.20 (rather than h = 0.15), what is optimal lot size and the required cycle inventory for polystyrene resin? Use these new numerical values in the problems below.Problem 4: Safety Inventory for Polystyrene Resin at SPC (1 hour, 20 points) Use the results from Problem 3 for all calculations. Answer the following questions about safety inventory for polystyrene resin at SPC: a) Why should SPC have a safety inventory? What is the average weekly demand for black plastic (and therefore polystyrene resin) for 2007? If the coefficient of variation (cv) for black plastic is 0.25, what is the standard deviation in the weekly demand? b) The polystyrene supplier has a lead-time of 2 weeks. SPC would like its Cycle Service Level (CSL) to be 0.95. Determine the necessary safety inventory (safety stock) level for polystyrene resin for a continuous replenishment policy. What is the Re-order Point (ROP)? What is the fill rate? What is the average inventory? What is the average flow time? c) Create a diagram that shows all the relevant quantities from part (b). d) In general, is the demand during the lead-time greater than or less than the lot size? Explain your answer with the help of the diagram from part (c).Problem 5: Sourcing for SPC (0.5-1.0 hour for reading; 0.5-1 hour to solve the problem; 25 points) Read the first four sections on “Sourcing Decisions in a Supply Chain” from the textbook (Sections 14.1-14.4 Third Edition/Fourth Edition). Use the results from Problem 3 for all calculations. Julie Williams needs to make a choice between the following 2 suppliers of polystyrene resin:
- 64. · Supplier 1: unit cost = $20 per unit (1 unit =1000lb.); average lead time= 1 week; standard deviation of lead time = 0.5 week; Batch or lot size =3000 units · Supplier 2: unit cost = $15 per unit (1 unit =1000lb.); average lead time= 2 weeks; standard deviation of lead time = 1 week; Batch or lot size = 5000 units Answer the following questions: a) Which supplier should Julie choose, based on minimizing total cost, if her inventory holding cost h = 0.20 and her desired target CSL = 95%? b) Create a supplier scorecard that Julie can use to compare different suppliers. (Hint: Use the Utility Function approach developed in CSE 171A/270A for choosing between alternatives, as well as ideas from the text.)Problem 6: Transportation Design for SPC (1-1.5 hours; 25 points) Read the section on “Trade-offs in Transportation design” from the textbook (Section 13.5 in Third Edition/Fourth Edition) Answer the following questions about transportation design for transporting polystyrene resin (PR) from the PR supplier to SPC: a) Create the appropriate table in Excel for comparing rail versus truck delivery options for modes of transportation. b) Use the table from (a) to select the optimal mode of transportation. Provide quantitative evidence to support your selection. (Make the appropriate assumptions about transportation and other costs).Problem 7: Execution of Your Plan (0.5 hours, 5 points) Use a table to compare your plan from Problem 1 (column 1) with its execution (column 2). Indicate the reasons for the difference between the plan and its execution (column 3). Add additional columns to capture recommendations for improved execution of your plans in the future. Write down three key lessons you learned in this course.(CSE 270B only) Problem 8: Pricing (2 hours for reading; 0.5 hours to solve the
- 65. problem; 10 points) Read the first two sections on “Pricing and Revenue Management in a Supply Chain” from the textbook (Sections 15.1, 15.2 in Third Edition/Fourth Edition). Summarize the key lessons learned from Section 2. Create a process for pricing a product for multiple customer segments. (While CSE 171B students are encouraged to do this problem, but they will NOT receive extra credit for it.)Extra Credit (5 possible points): Project SCM Software Application · Apply the SCM software developed in your group project to solve all the quantitative problems on the Midterm and Final Exams. What was your contribution to the development of the SCM software? · Explain how the company from your group project could use the SCM software to manage their supply chain. You may want to start with the supply chain network (diagram) from your project to describe the information inputs and outputs for the SCM software. · Develop an IT architecture (networks, databases, servers, etc.) for your SCM software to manage the information (driver) for your supply chain. How would you use this IT system to minimize the bull-whip effect? Forecasting Questions Student Name University Affiliate
- 66. Forecasting Questions Problem 1: Planning Step 1: Define – Create a list of all the tasks that require to be completed so as to complete this examination appropriately and keep a track of the tasks accordingly Step 2: Plan – What information is available for solving the problem? Lecture Notes and Canvas Handouts. The lecture Notes provided is from Notes on PERT Chart, GRANTT Chart and Activity Matrix. Step 3: Execute - Create an activity matrix and a table to make comparisons on your plan Activity Matrix A B C D E F G H I J K
- 68. C X x C x D x
- 69. D E E x
- 72. J J x K
- 75. O O P x
- 76. P Q x x Q x R
- 78. PROJECT TITLE CSE171B Midterm COMPANY NAME CSE171B PROJECT MANAGER Shen Cheng DATE 2/11/2019 WBS NUMBER TASK TITLE TASK OWNER START DATE END DATE DURATION PCT OF TASK COMPLETE
- 83. 1.4 Keep track of each task and document Completion Shen Cheng 2/7/20 2/11/20 100%
- 84. 2 Problem2
- 85. 2.1 Read the Specialty Packaging Corporation Case Study Shen Cheng 2/8/20 2/8/20 1 100%
- 87. 2.3 Supply Chain Strategy Shen Cheng 2/8/20 2/8/20 1 100%
- 88. 2.4 Where does SPC lie in the zone of strategic fit between IDU and responsiveness? Shen Cheng 2/8/20 2/8/20 1 100%
- 89. 2.5 Identify what SPC’s high-level SC strategy should be for each of the SC drivers. Shen Cheng 2/8/20 2/8/20 1 100%
- 90. 3 Problem 3
- 92. 3.2 Forecast Demand for black plastic using the 5 Methods Shen Cheng 2/8/20 2/10/20 1 100%
- 93. 3.3 Identify the better method for Black plastic. Shen Cheng 2/8/20 2/10/20 1 100%
- 94. 3.4 Was the Hypothesis Correct? Shen Cheng 2/8/20 2/10/20 1 100%
- 95. 3.5 Forecast Demand for 2007Black plastic. Shen Cheng 2/8/20 2/10/20 1 100%
- 96. 4 Problem 4 4.1
- 97. Why should SPC have a cycle inventory? What are the following values for black plastic? Shen Cheng 2/10/20 2/10/20 1 100% 4.2 Shen Cheng 2/10/20
- 99. 5 Problem 5
- 100. 5.1 Should SPC have a safety inventory? Why? How much safety inventory would you recommend for SPC? Shen Cheng 2/11/20 2/11/20
- 102. 6.1 Create table to compare your plan Shen Cheng 2/11/20 2/11/20 1 100%
- 103. PERT Chart Identify the “critical path” using a PERT Chart ( A | 20 Min B | 40 Min C | 15 Min D | 15 Min E | 15 Min F | 15 Min H | 15 Min I | 15 Min J | 5 Min
- 104. K | 300 Min L | 10 Min M | 5 Min S | 30 Min R | 15 Min Q | 15 Min P | 20 Min O | 55 Min N | 15 Min G | 15 Min ) Running head: FORECASTING QUESTIONS 1 FORECASTING QUESTIONS 18 Tasks Actual Time Allocated A 20 Minutes B 40 Minutes C, D, E 15 Minutes Each F, G, H, I 15 Minutes Each J 5 Minutes K 300 Minutes L 10 Minutes M 5 Minutes
- 105. N 15 Minutes O 55 Minutes P 20 Minutes Q, R 15 Minutes S 30 Minutes Keep track of each task and document completion
- 106. Step 4: Check – Is the work done correct in every detail? This work is correct all ways because while working on the problem, intense planning was conducted for execution. To make it more clear and accurate, there was the use of lecture notes and canvas handouts for reference. Step 5: Learn and Generalize – This exercise has been great as it has enabled me to stay on track and also become more accurate and precise. This will help me produce high quality results during finals. Problem 2: Supply Chain Strategy for SPC Step 1: Define the Problem - Establish and Analyze SPC’s competitive strategy Step 2: Plan – Step 2: The information available for solving the problem include lecture notes, textbooks and the ‘Specialty Packaging Corporation’ Case Study Step 3: Execute – SPC’s competitive strategy should be the Porter’s Five Forces Model. This is shown in the diagram belowCompetitive Strategy Porter’s Five (Six) Forces Analysis ( New Entrants: Alpha Packaging SKS Suppliers: Polystyrene Resin supplier Competitors: Amcor Berry Plastic Tetra Pak Buyers: Supermarket Consumers
- 107. Compliments: N/A Substitutes: Ceramic Glass Eco-Friendly Materials ) Explanation of the six forces: The Porter’s Model has five forces and they will help SPC in the following ways; i. Competitors –Competition is very high because most companies packaging process is affordable as plastic is cheap. ii. New Entrants – The force of new entrants is low as most new entrants are small scale company’s iii. Complements – There are no complements obtained iv. Suppliers – the supplier force is medium v. Buyers – The buyer’s force is high vi. Substitutes – The large force of substitute products is low. Supply Chain Strategy SPC Strategic FitEfficiency/Responsiveness SpectrumHighly Efficient Somewhat Efficient Somewhat Responsive Highly Responsive In the manufacturing and supply of plastic containers, Specialty Packaging Corporation (SPC) is supposed to aim for high efficiency in its supply chain to be able to match with customer’s demand. The following graph represents the Implied Demand Uncertainty for SPC. Implied Demand Uncertainty High Responsiveness / Low Efficiency
- 108. Low Responsiveness / High Efficiency Low IDU High IDU In the above figure, SPC lies at the lower part of the IDU and it is responsive in the Zone of Strategic Fit due to the relatively low demand of products prevailing. SPC is required to develop strategies that will enable it to have a high-level supply chain strategy. Therefore, SPC is required to identify with six drivers that help in improving the supply chain and they are Transportation, Facilities, Inventory, Information, Pricing and Sourcing. Developing these factors will help in enhancing efficiency in the supply chain process. Step 4: Check – My assumptions on the company and products are valid. I have also understood the SPC Manufacturing process Step 5: Learn and Generalize – SPC’s function in the supply chain process should be cohesive and should also work towards succeeding in its objectives. Problem 3: Demand Forecasting For SPC Step 1: Define – Establish the hypothesis and forecasting method that Julie William should use Step 2: The information available for solving the problem include lecture notes, textbooks and the ‘Specialty Packaging Corporation’ Case Study Step 3: Execute Static Method Given Data Year
- 109. Period Quarter Black plastic Demand ('000 lbs) 2002 1 I 2250 2 II 1737 3 III 2412 4 IV 7269 2003 5 I 3514 6 II 8143 7
- 111. 15 III 4315 16 IV 12035 2006 17 I 5648 18 II 3696 19 III 4843 20 IV 13097 De-seasonalize the demand in order to run linear regression to estimate various levels and trends. The equation to use is: We are measuring demand on a quarterly basis therefore;
- 112. periodicity (p) is 4. We then start deseasonalizing demand at period (t) =3. Excel formula used: = (D2+D6+2*SUM (D3:D5))/8 Year Quarter Period Black plastic Demand ('000 lbs) De-Seasonalized Demand 2002 I 1 2250 II 2 1737 III 3 2412 3575 IV 4 7269
- 113. 3784 2003 I 5 3514 3965 II 6 8143 4070 III 7 3459 4119 IV 8 7056 4272 2004 I 9 4120 4237 II 10 2766
- 115. 2006 I 17 5648 6490 II 18 3696 6688 III 19 4843 IV 20 13097 Forecasting using Holt’s Method We now forecast demand using Level and Trend corrected exponential smoothing. The assumption is that the data has level, L, and trend, T, only. Process: Step 1: Regress the given data to compute the initial values of the level, L0, and initial trend T0. Forecast, F1 = L0 +T0. Step 2: Adapt Use two smoothing constants, α=0.06 and β=0.06, to smooth respectively level and trend. L1 = αD1 + (1-α) [L0 +T0], T1 = β [L1 – L0] +(1-β) T0, Forecast, F2 = L1 +T1 Step 3: Forecast. Ft+1 = Lt +Tt, Lt+1 = αDt+1 + (1-α) [Lt +Tt], Tt+1 = β [Lt+1 – Lt] +(1-β) Tt In order to obtain L0 and T0, I graphed the Demand for black plastic and obtained the slope of the functions as L0= 2042.8 and T0=286.61
- 116. Forecasting using Winter’s Method Winter’s Method starts off similarly to the static method. We de-seasonalize demand by running it through a regression analysis, and then find the seasonal factors for it. Since the data remains the same as the static method, the values are equal to: L = 3046.5 and T = 226.87 Savg1 = (S1+S5+S9+S13+S17)/5 = 0.81, Savg2 = (S2+S6+S10+S14+S18)/5 = 0.54, Savg3 = (S3+S7+S11+S15+S19)/5 = 0.64, Savg4 = (S4+S8+S12+S16+S20)/5 =1.65 Initial Forecast = F1= (L0+ T0) (S1) = 2665 Adaptation: Let α=0.06, β=0.06, γ=0.06, Lt+1 = α (Dt +1/St+1) + (1-α) (Lt + Tt), Tt+1 = β (Lt+1 – Lt) + (1 - β) Tt, St+p+1 = γ (Dt +1/Lt+1) + (1 - γ) St+1 Demand Vs Forecast using Winter’s Method The forecasting method that Julie Williams should use is the Winters Forecasting Method as it has been able to forecast black plastic well. After analyzing the data, it is correct to say that the greatest factor is the seasonality of data and there is a negative significant trend. The forecasting results were as follows and the annual demand was drawn to be 28770 in the year 2007. 2007 Demand Forecast for Black Plastic (‘000lb.): Year Quarter Period Forecast Ft 2007
- 117. I 21 6090 II 22 4197 III 23 5042 IV 24 13441 Step 4: Check – I have gone through the work several times and I have elaborated all numbers and equations appropriately. My assumptions are also reasonable as the results that I obtained make a lot of sense. Step 5: Learn and Generalize – To establish the most appropriate method of forecasting, we have to try all methods and see how well they predict the actual demand. Through error analysis, we have been able to see which method was the best for Julie and Winters Model was finalized to be appropriate to improve her supply chain and match with both supply and demand. Problem 4: Cycle Inventory for Polystyrene At SPC Step 1: Define – Establish why SPC should have a cycle inventory in place. Step 2: Plan – Information for this question is available on Lecture Notes, Textbooks and SCM text on ‘Short-Term Discounting’ Step 3: Execute SPC should have a cycle inventory so that it may be able to minimize its total inventory costs. SPC can also minimize the
- 118. total cost of holding inventory and transportation through calculating the optimal quantity of inventory per shipment. Given data/data from problem 3 Variables: Annual demand for black plastic = 28,770, Unit Cost =$25.00, % Holding Cost = 15%, Fixed shipping cost per order =$300, 1 unit = 1000 pounds (lbs) a. Lot size per shipment to minimize total cost D = annual demand = 28,770 S = 300 h = 0.10 C =20, Q* = = = 2,145.50693. Lot size per shipment to minimize total cost is approximately 2,146 units b. Economic order quantity(EOQ) The EOQ is similar with the Optimal Order Size which is also the lot size per shipment. The total cost has been minimized therefore the Economic Order Quantity is equal to 2,146 units. c. Number of shipments/year of polystyrene resin in order to meet the forecasted demand for black plastic in2007. D = annual demand = 28,770 Q* = 2,146 units, Insert formula as 28,770/2,146 =13.406337Number of shipments/year of polystyrene resin in order to meet the forecasted demand for black plastic in 2007 is approximately 13 shipments.d. Cycle inventory Q* = 2,146 units, Insert formula as 2,146/2 = 1073. The Cycle Inventory is approximately 1,073 units. e. Cycle inventory holding cost Holding cost =hC Cycle inventory holding cost = (Q*/2) hC (2,146/(2) (0.15)(25) =4,023.75 Cycle inventory holding cost is $4,023.75
- 119. f. Replenishment cycle time a. ��������ℎ�������������= # days in a year / # shipment/year b. 365/13 =28.08 Replenishment cycle time is approximately 33days g. Average flow time D = annual demand = 28,770 Q* = 2,146 units 2,146/2 (28,770) = 0.0372957 Average flow time is around 0.037 year = 0.44 month = 13days Short Term Discounting: Now, if the supplier offers a promotional discount of 25% per unit at the beginning of the year, we determine the optimal order quantity and the size of the forward buy below: Given Data d = discount = 25%, D = demand = 28,770, h = 15%, C = 25, Q* = 2,146 Qd = 0.25(28,770) / (25-0.25)0.15 + 25(2,146)/(25-0.25) Qd =7,192.50 / (24.75)0.15 + 53,650/24.75 Qd = 7192.50 / 3.7125 + 53,650/24.75 Qd =1937.3737 + 2167.6768 Qd = 4,105.0505 Insert formulae to obtain 4,105.0505, therefore optimal order quantity at the discounted price is around 4,105 units Forward buy = 4,105 – 2,146 = 1,959 units Step 4: Check – My work is correct and accurate as I used the required texts and notes in every detail. Therefore, my assumptions are correct and accurate. Step 5: Learn and Generalize – After calculating the values of optimal lot size and economic order quantity, SPC can also take advantage of the economies of scale. I now have a better understanding on short-term discounting.
- 120. Problem 5: Safety Inventory for Polystyrene Resin at SPC. Step 1: Define – Establish whether SPC should have a safety inventory Step 2: Plan – Information is available on Lecture Notes and Textbooks Step 3: Execute SPC is required to have a safety inventory for polystyrene resin at SPC as the demand is uncertain and product storage problems may occur if the actual demand exceeds the forecasts. SPC should also ensure that it has maintained a safety inventory for black plastic. The amount of safety inventory that I would recommend for SPC will vary due to certain circumstances. The black plastic peak reduces every second quarter of the year and by using the Winter’s method, the tracking signal value at period 13 is estimated to be 2.03. The forecasts as period 13 have a value of 11,825 and the actual demand is 13,673. Results show that SPS is supposed to have a safety inventory of 2000 units to counteract the underestimation with the remaining left over inventory which can also be used for other future periods. Step 4: Check - My estimates on the amount of Safety Inventory that SPC should hold seem reasonable and my assumptions are true as I have used the required textbooks and lecture notes appropriately. Step 5: Learn and Generalize – I have learned that with a basic understanding of safety inventory, a manager can reach at a reasonable estimate on the amount of safety inventory required. Problem 6: Execution of Your Plan Step 1: Define - Using a table compare your plan from Problem 1 with its execution. Indicate the reasons for the difference between the plan and its execution. Add at least one more column. Step 2: Information for the problem is obtained from Problem 1 solutions. Assumptions have been made by using the problem solver, student and audience. Build a table to compare the plan with the execution.
- 121. Step 3: Execute the Plan Plan Execution Reason Improvements Problem 1: 0.6 Hours Finished on time Hours Spent: 0.6 No difference, plan was well executed, and work done accurately No improvements needed because everything went as planned. Problem 2: 1.5 Hours Finished on time Hours Spent: 1.0 This problem was pretty straightforward, . No improvements needed because everything went as planned. Problem 3: 5.0 Hours Took much longer than I expected Hours Spent: 5.5 This problem was time consuming and getting correct data and numbers was quite difficult. In the future I will automate to process of forecasting using Visual Basic. Problem 4: 1.6 Hours Also took longer than I expected Hours Spent: 1.8 Time Planning was unplanned hence I started the question late The problem was executed well Problem 5: 0.3 Hours Finished Earlier than expected Hours Spent: 0.4 No difference due to being on schedule going into this phase of the project
- 122. I lacked more data information for extensive analysis of the question Problem 6: 0.4 Hours Finished on time Hours Spent: 0.6 No difference, plan was well executed, and work was clear and accurate No improvements were required as everything was planned well. Step 4: Check – The work written is correct and accurate as study was done through using observations. Step 5: Learn and Generalize – The demand forecasting problem was very time consuming as it has more problems to solve than others.