The document is a case study analyzing production network design options for Coolwipes. It provides cost data for serving the US market from Coolwipes' existing Chicago plant or adding new plants. Adding plants in Princeton, Atlanta and LA would reduce total costs to $29,188.80. Transportation costs impact the optimal solution - with lower costs, adding plants is still recommended but with different production amounts, while higher costs make the single Chicago plant most cost effective.
The document is a case study analyzing production network design options for Coolwipes. It provides cost data for serving the US market from Coolwipes' existing Chicago plant or adding new plants. Adding plants in Princeton, Atlanta and LA would reduce total costs to $29,188.80. Transportation costs impact the optimal solution - with lower costs, adding plants is still recommended but with different production amounts, while higher costs make the single Chicago plant most cost effective.
The document is a case study analyzing production network design options for Coolwipes. It provides cost data for serving the US market from Coolwipes' existing Chicago plant or adding new plants. Adding plants in Princeton, Atlanta and LA would reduce total costs to $29,188.80. Transportation costs impact the optimal solution - with lower costs, adding plants is still recommended but with different production amounts, while higher costs make the single Chicago plant most cost effective.
Case Study: Designing the Production Network at Coolwipes
Submitted By: Tharshini Manalan (COHORT 9 - ID 814789)
For SUPPLY CHAIN MANAGEMENT (BJMP 6023) DR. MARTINO LUIS
BJMP6023 Supply Chain Management
Case study: Designing the Production Network at Coolwipes Question 1 What is the annual cost of serving the entire nation from Chicago? Based on the calculation below, the total cost to serve Chicago is $32,661.40. Plant Costs and Capacity
Question 2 Do you recommend adding any plant(s)? Is so, where should the plant(s) be built and what lines should be included? Assume that the Chicago plant will be maintained at its current capacity but could be run at lower utilization. Would your decision be different if transportation costs are half of their current value? What if they were double their current value? There was reduction of total cost to $29,188.80. Based on this reduction would like to recommend on building a plant at Princeton, Atlanta and LA. All of this plant can offer both the Wipes and Ointment product line. The calculation is shown below :
The recommendation would remain the same to build all the additional plants, but with different production quantities if the transportation costs were half their current amount as the resulting total cost would now be $16,947. 88 as calculated below:
If transportation costs were double their current levels, the recommendation would be to stay with the Chicago facility servicing the entire nation as the total costs would rise to $86,530.20. Plant Costs and Capacity
Zone Northwest southwest Upper midwest lower midwest northeast southeast Total
Wipes 500 700 900 800 1000 600 4500
BJMP6023 Supply Chain Management
Ointment 50 90 120 65 120 70 515
Transportation Costs
North west South west Upper mid west lower mid west North east South east
Transport cost Multiplier Chicago 12.64 12.64
7.36
8.08
11.52 11.92
2 Princeton, NJ 13.20 13.20
11.52
11.84 7.36 8.16
Atlanta 13.44 12.96
11.84
8.16 8.08 7.28
LA 8.72 7.36
12.64
12.64
13.44 13.20
Wipes Variables
North west South west Upper mid west lower mid west North east South east Fixed Capacity Chicago 0 0 900 800 0 0 1 3300 Princeton, NJ 0 0 0 0 1000 0 0.5 0 Atlanta 0 0 0 0 0 600 0.3 0 LA 500 700 0 0 0 0 0.6 0 BJMP6023 Supply Chain Management
Demand 0 0 0 0 0 0
Ointment Variables
North west South west Upper mid west lower mid west North east South east Fixed Capacity Chicago 0 0 120 65 0 0 1 815 Princeton, NJ 0 0 0 0 120 0 0.12 0 Atlanta 0 0 0 0 0 70 0.07 0 LA 50 90 0 0 0 0 0.14 0 Demand 0 0 0 0 0 0
Total Cost 86530.2
BJMP6023 Supply Chain Management
Question 3 As calculated below in the three spreadsheets, the recommendations would be exactly as above for current costs, transportation costs at half their current level and with transportation costs at double their current costs. The only difference in the recommendations would involve the production quantities at each facility.