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Assessing the value of supply chain management

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CASE 22: ASSESSING THE VALUE OF SUPPLY CHAIN MANAGEMENT OPTIMIZING SHIPMENTS One of the main products of the Fairway Woods Company is custom-made golf clubs. The California; Salt Lake City, Utah; Albuquerque, New Mexico; Chicago, Illinois; and New York Texas) and are then shipped by truck to five distribution warehouses in Sacramento, way to reduce them. For the upcoming golf season, an estimate has been created as to the total City, New York. Because shipping costs are a major expense, management is investigating a output needed from each manufacturing plant and how much each warehouse will require to satisfy its customers. The CIO from Fairway Woods Company has created a spreadsheet for you, FAIRWAYS.xls, of the shipping costs from each manufacturing plant to each warehouse manufactured at three plants ( Denver, Colorado; Phoenix, Arizona; and Dallas, clubs are as a baseline analysis. SOME PARTICULARS YOU SHOULD KNOW 1. The problem presented involves the shipment of goods from three plants to five regional warehouses. 2. Goods can be shipped from any plant to any warehouse, but it costs more to ship goods over long distances than over short distances. 3. The challenge presented is to determine the amounts to ship from each plant to each warehouse at a minimum total shipping cost in order to meet the regional demand, while not exceeding the plant supplies. 4. Specifically you need to focus on: a. Minimizing the total shipping cost. b. Total shipped must be less than or equal to supply at plant. c. Totals shipped to warehouses must be greater than or equal to demand at warehouses. d. Number to ship must be greater than or equal to 0. 5. File: FAIRWAYS.xls (Excel file). AWN 1 Fairways Woods Company Shipping Analysis } 2 3 4 Number to ship from plant to warehouse: 5 Plants Total Sacromento Salt Lake Chicago Albea New York 6 Denver 5 1 1 1 1 1 7 Phoenix 5 1 1 1 1 1 8 Dallas 5 1 1 1 1 1 9 10 Totals: 3 3 3 3 3 11 12 Demands by Whse --> 180 80 200 160 220 13 Plants Supply Shipping costs from plant to warehouse: 14 Denver 310 10 8 6 5 4 15 Phoenix 260 6 5 4 3 6 16 Dallas 280 3 4 5 5 9 17 18 Shipping: $83 $19 $17 $15 $13 $19

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