Alco Inc by

12350 Shankar R
12446 Sameep Luthra
Plant to DC TL(Transport)
DC to customer -LTL
(Transport)
Lead Time(P to DC)
Reorder Interval
H
CSL

0.09 per unit

0.1
5
6
0.15
0.95

per unit
Days
Days
per unit per day

L
T

Region 2

Region 3

Demand Data
Part

Region 1

Region 4

Region 5

1
Mean
SD

35.48
6.98

22.61
6.48

17.66
5.26

11.81
3.48

3.36
4.49

2.48
3.16

4.15
6.20

6.15
6.39

6.16
6.76

7.49
3.56

0.48
1.98

0.73
1.42

0.80
2.39

1.94
3.76

2.54
3.98

3
Mean
SD
7
Mean
SD

Demand and Std

Deviation during T+L
periods
Part

Region 1

Region 2

Region 3

Region 4

1
Demand
SD

390.28
23.15

248.71
21.49

194.26
17.45

129.91
11.54

Demand
SD

27.28
10.48

45.65
20.56

67.65
21.19

67.76
22.42

Demand
SD

5.28
6.57

8.03
4.71

8.80
7.93

21.34
12.47

Cycle Inventory and

Safety Stock
Part

Region 1

Region 2

Region 3

Region 4

1
Cycle Inventory

106.44

67.83

52.98

35.43

Safety Stock

38.08

35.35

28.70

18.98

Cycle Inventory
Safety Stock

7.44
17.24

12.45
33.82

18.45
34.86

18.48
36.88

Cycle Inventory
Safety Stock

1.44
10.80

2.19
7.75

2.40
13.04

7
5.82
20.51
Total Cycle Inventory
Total Safety Inventory
Total Inventory
Total Cost of Inventory
Total Cost

No of
Products Total
10
909.20
20
528.60
70
454.30
Total
Annual
Demand

1892.10
690616.5
Transportation
Cost

Region 5

Total

36.96
14.89

1000.12

82.39
11.81

290.73

27.94
13.20

71.39

Region 5
10.08

Total
272.76

131217.1

Total Cycle Inventory

Total Safety Inventory
Total Cost of Inventory

24.49

145.60

22.47
19.42

79.29
142.22

7.62
21.71

19.47
73.81
5676.3
9467.24
15143.54
829108.583
960325.718

Plant to NDC (Transport)

NDC to Customers (Transport)
Lead Time(P to DC)
Reorder Interval
H
CSL
Correlation Coefficient

0.05
0.24
5
6
0.15
0.95
0

per unit
per unit
Days
L
Days
T
per unit per day
0.20

0.4

0.6

Demand Data

Part

Region 1

Region 2

Region 3

Region 4

1
Mean
SD

35.48
6.98

22.61
6.48

17.66
5.26

11.81
3.48

2.48
3.16

4.15
6.20

6.15
6.39

6.16
6.76

0.48
1.98

0.73
1.42

0.80
2.39

1.94
3.76

3
Mean
SD
7
Mean
SD

Demand and Std Deviation

during T+L periods
Total at
Total at NDC NDC Corr
Corr Coff =0 Coff =0.2

Part

Total at
NDC Corr
Coff =0.4

1
Demand
SD

1000.12
40.71

1000.12
53.79

1000.12
64.25

Demand
SD

290.73
40.30

1000.12
52.86

1000.12
62.97

Demand
SD

71.39
21.40

1000.12
27.73

1000.12
32.87

Cycle Inventory and Safety Stock

Total at
Total at NDC NDC Corr
Corr Coff =0 Coff =0.2

Part

Total at
NDC Corr
Coff =0.4

1
Cycle Inventory
Safety Stock

272.76
66.96

272.76
88.47

272.76
105.69

Cycle Inventory
Safety Stock

79.29
66.28

272.76
86.95

272.76
103.57

7
Cycle Inventory
Safety Stock
Total Cycle Inventory
Total Safety Stock
Total Inventory
Total Holding Cost
Total Cost

19.47
272.76
272.76
35.20
45.61
54.06
5676.30
27276.00
27276.00
4459.09
5816.72
6912.55
10135.39
33092.72
34188.55
554912.41 1811826.23 1871822.98
755191.19 2012105.01 2072101.77

If considering construction costs

Construction
Saving
Cost

1200000.00
250000.00
1705191.19 2962105.01 3022101.77

0.8

Region 5

Total at Total at Total at Total at Total at

Total at NDC NDC Corr NDC Corr NDC Corr NDC Corr NDC Corr
Corr Coff =0 Coff =0.2 Coff =0.4 Coff =0.6 Coff =0.8 Coff =1

No of
Products
10

3.36
4.49

90.92
12.27

90.92
90.92
90.92
16.22 19.37348 22.08332

90.92
24.4952

90.92
26.69

26.43
12.15

90.92
90.92
90.92
90.92
15.94 18.98513 21.60645 23.94247

90.92
26.07

6.49
6.45

90.92
90.92
90.92
90.92
8.36 9.909617 11.24666 12.44082

90.92
13.53

20
7.49
3.56
70
2.54
3.98
Total
Annual
Demand
Transportat
ion Cost

Total at
NDC Corr
Coff =0.6

Total at
NDC Corr
Coff =0.8

690616.50
200278.79

Total at NDC
Corr Coff =1

1000.12
73.24

1000.12
81.24

1000.12
88.52

1000.12
71.66

1000.12
79.41

1000.12
86.46

1000.12
37.30

1000.12
41.26

1000.12
44.87

Total at
NDC Corr
Coff =0.6

Total at
NDC Corr
Coff =0.8

Total at NDC
Corr Coff =1

272.76
120.47

272.76
133.63

272.76
145.60

272.76
117.87

272.76
130.61

272.76
142.22

272.76
272.76
61.35
67.87
27276.00
27276.00
7856.97
8699.44
35132.97
35975.44
1923529.92 1969655.47
2123808.70 2169934.26

272.76
73.81
27276.00
9467.24
36743.24
2011692.16
2211970.94

3073808.70 3119934.26

3161970.94

Case 1
Transport Costs
For Part 1
For part 3 and 7
Total Transport

Centralise only Part 1

96238.82
41512.91
137751.73

Inventory
Total Cycle Inventory
Total Safety Stock
Total Inventory
Inventory Cost

5676.30
7422.159984
13098.46
717140.6841

Total Cost

854892.4141

Case 2
Transport Costs
For Part 3
For part 1 and 7
Total Transport
Inventory
Total Cycle Inventory
Total Safety Stock
Total Inventory
Inventory Cost
Total Cost
Case 3
Transport Costs
For Part 7
For part 1 and 3
Total Transport

Centralise only Part 3

55952.31
68164.115
124116.425

5676.3
9467.235763
15143.53576
829108.583
953225.008
Centralise only Part 7

673671.74
99711.43
773383.17

Inventory
Total Cycle Inventory
Total Safety Stock
Total Inventory
Inventory Cost

4479.9
8099.030894
12578.93089
688696.4664

Total Cost

1462079.636

Case
NDC
Centralise only Part 1
Centralise only Part 3
Base
Centralise only Part 7

Total Cost
755191.19
854892.41
953225.01
Recommended
960325.72
1462079.6 Not Recommended

Assumption: Correlation Coefficient = 0

In case the value increases the total costs also increase hence the recommendations could change.