115541091 delivery strategy at moonchem aggregation problem

8/18/2019 115541091 Delivery Strategy at Moonchem Aggregation Problem

1/19

Delivery Strategy

atSupply Chain Management ( IE

659)Professor – Dr San!hoy " Das

Case Stu#y Pro$e!t %eam 6& Mir$am Mils!h

'aurav Ma$um#ar

"arthigeyanMa!hen#ran

enry Mensah


2/19

vervie*+)Intro#u!tion of Moon!hem

,)Pro-lem vervie*

.)/uestions

0)Solution Strategy 1 Illinois Pilot

Stu#y5)perational Data

5+) Moon!hem2s E3isting Distri-utionStrategy

5,) 4lternative +& o 4ggregation7Mo#el

5.) 4lternative ,& Complete4ggregation7 Mo#el

50) 4lternative .& %ailore#4ggregation7 Mo#el11/15/2012Milsch, Majumdar, Machendran,Mensah 2

p

.0

5

6

9

++

+.

+5

+:


3/19

+) Intro#u!tion of Moon!hem Moon Chemical Co. Ltd. (Moonchem) established in 1996 in

an!"hou, China

Leadin! manu#acturer o# $

a) %ndustrial Chemicals,

b) Spe!ialty Chemi!als (eg Cosmeti! Chemi!als);

c) &ood 'ddities,

d) harmaceutical Chemicals etc.

* Manu#acturin! lants + 0 -istribution Centers orldide.

%n the Spe!ialty Chemi!als mar


4/19

Moonchem7s ear8end usiness eie reeals the ne inentor3

strate!3 o# :Consi!nment %nentor3; has achieed a lo* Inventory

%urnover 8atio (I%8) of ,; in s4ite o# hain! a sta-le Pro#u!t

Deman# #rom the Customers.

o# Moonchem7s %nentor3 has been classied as

:Consignment Inventory;.

=oeer, onl3 ,=> o# their total number o# customers use

Consi!nment %nentor3.

Mr. >ohn ?res!e, @ o# u44l3 Chain -e4artment, decided to looA ho

Consi!nment %nentor3 is bein! mana!ed and to come u4 ith an

a44ro4riate 4lan to increase the %B alue.

11/15/2012Milsch, Majumdar, Machendran,Mensah

,) Pro-lem vervie*


5/19

1) hat is the !urrent 4nnual Cost o#Moonchem7s

trate!3 o# sendin! #ull trucAloads to eachcustomer in

the eoria re!ion to re4lenish consi!nmentinentor3D

2) Consider #i?erent #elivery options andealuate the

costs o# each. hat delier3 o4tion do 3ourecommend

#or MoonchemD

11/15/2012Milsch, Majumdar, Machendran,Mensah 5

.) /uestions


6/19

I%8 @ (4nnual Sales Aalue of 'oo#s Sol#) B (4verageInventory Aalue)

Moonchem can7t directl3 inEuence the #eman# from its!ustomers

ut it can decrease the 4verage Inventory value -y

#e!reasing &

Cy!le Inventory

subseFuentl3 the %otal 4nnual Costs incurred.


0) Solution Strategy


7/19

' 4ilot stud3 is conducted b3

Moonchem in %llinois tate in the

Peoria region (as marAed in the

ma4) #or the consi!nment inentor3

distribution strate!3 anal3sis. Bhe

resultin! anal3sis is tabulated belo.Customer

%ypeum-er ofCustomers

%otalConsumptio

n(l-Bmonth)

mall 12 1000

Medium 6 5000

Lar!e 2 12000

11/15/2012Milsch, Majumdar, Machendran,Mensah G

0) Illinois Pilot Stu#y


8/19

Lo!istics Contractor$ Holden BrucAin!

BrucA Ca4acit3$ 0,000 lbs

ull %ru!


9/19

Moon!hem sen#s FF %8C"F4DS to ea!h !ustomer;

irrespe!tive of the

!ustomer type

K MK LK 0,000 lbs


10/1911/15/2012

Milsch, Majumdar, Machendran,Mensah 10

5+) Moon!hem2s E3istingDistri-ution Strategy


11/19

Bhe 4roducts are deliered in#epen#ently to each t34e o#

customer on a :>ust8in8Bime; basis here the ptimal r#er

/uantity #or each t34e o# customer is 4redicted usin! the basic

E/ Inventory Mo#el.

N K J(,GDGS)B(hGC)K

n K D B /G

'nnual =oldin! Cost, 4C K (C3cle %nentor3) NhNC K (/GB,)GhGC

'nnual


12/19


5,) 4lternative + – o4ggregation7 Mo#el


13/19

Pro#u!ts for ea!h type of !ustomer -eing #elivere# $ointly

in ea!h tru!


14/19


5.) 4lternative , – Complete4ggregation7 Mo#el


15/19

Pro#u!ts are #elivere# $ointly for a sele!te# su-set of typeof !ustomers

Step +$ Bhe t34e o# Customer ith the hi!hest


16/19


50) 4lternative . – %ailore#4ggregation7 Mo#el


17/19

11/15/2012 Milsch, Majumdar, Machendran,Mensah 1G

6) Inferen!e 1 8e!ommen#ation

I0

I10,000

I20,000

I0,000

I0,000

I50,000

I60,000

IG0,000

Botal Costs Botal C3cle %nentor3


18/19

Complete 4ggregation7 Model is the most suitable -istribution

trate!3 hich

Moonchem should im4lement.

%t ould result in a 5:+> re#u!tion in %otal Costs and :55>

re#u!tion in the

%otal Cy!le Inventory, hich ould in turn result in a higher I%8

for11/15/2012 Milsch, Majumdar, Machendran,Mensah 1*

6) Inferen!e 1 8e!ommen#ation


19/19

%4" L8 L8 4%%E%I

11/15/2012 Milsch, Majumdar, Machendran,Mensah 19

/ES%IS N

115541091 delivery strategy at moonchem aggregation problem

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