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    MIDDLE EAST TECHNICAL UNIVERSITY EM-502 Operations Management CASE STUDY 2 24.05.2017 Hasan Tekin Belen Rasim Kuş    Hizmete Özel / Confidential Table of Content 1.   Introduction  ................................................................................................................................ 1   2.   Solution  ....................................................................................................................................... 1 3.   Appendix  ..................................................................................................................................... 3  1 1.   Introduction IHK Co. is a family business that serves as a logistics provider. They ships manufacturer’s products to manufacturer’s warehouses via their distribution center. IHK Co. hired a consultancy firm in order to analyze operations. According to consultant’s eval uation, IHK Co. has to consider open new distribution centers to satisfy the requirements of customers. The customer provides three possible scenarios that tell how much total yearly demand is and how total demand is allocated over warehouses. By the helps of these information, IHK Co. must determine how many new distribution centers will be open, in which city new distribution centers open, and which distribution center is assigned for each warehouses. Moreover, IHK Co. must decide cheapest way to satisfy its customer’s demand in all cases . The shipment can be done by leasing trucks which is the option has a fixed cost or by outsourcing which is the option has not fixed cost but has higher variable cost than leasing truck. Also, single sourcing strategy will be followed. 2.   Solution Forecasting the demand may be the most critical part of an investment or allocation of shipment decision. In order to achieve the best approachment, a possibility weighted demand scenario is found out as expected demand with the provided demand data for three scenarios by customer. The expected demand scenario that the solution is based on is given in Table 2.1 Scenario-1 (0.3) Scenario-2 (0.5) Scenario-3 (0.2) Expected Ankara 13000 10000 17000 12300 Adana 10000 7000 12000 8900 Afyon 6000 12000 8000 9400 Bursa 9000 12000 13000 11300 İstanbul  20000 15000 30000 19500 Kayseri 7500 8000 8000 7850 Samsun 5500 13000 9000 9950 Trabzon 7000 9000 10000 8600 Erzurum 9500 11000 1200 8590 Diyarbakır  11500 12500 12500 12200 Antalya 10500 12000 15000 12150 İzmir  10000 13000 13000 12100 Konya 6000 11000 8000 8900 Sivas 4000 9000 5500 6800 Total 129500 154500 162200 148540 Table 2.1: Three possible demand scenario and expected demand scenario  Hizmete Özel / Confidential 2 :   :                    ℎ              :      :ℎ        ℎ         {0 ℎ ℎ    1 ℎ ℎ    }   0 ℎ ℎ       1 ℎ ℎ            0 ℎ ℎ            1 ℎ ℎ               Hizmete Özel / Confidential 3        40,000∙+400,000∙ = +500,000∙ = −1+  ∙0.2∙ == +  ∙0.4∙ ==  s.t. 1   1        2 ∑   +  ≤80,000∙ =  ∀∈1,…,14     3  ≤3 =        4  ≤ == 30,000       5 ∑     İ== 40∙≤200  ℎ    6  ≤1 =  ∀∈1,…,14     7  = ≤∙(1−  ) ∀∈1,…,14     8   ≤   9   ≤∙    10   ≥ ∀∈1,…,14    ==  
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