Case StudiesPresentation

Principles of Logistics and Supply Chain Management, Fall 2014

Red Team - Sumeet, Aaron, Nicholas,Travis, Trevor, Dylan

Case 1

The Facts:

1) Forecasted Demand is 100,000 units per month.

2) Shipments can only be received on Mondays.-Lead time is 13 days (Busan to Long Beach)

3) 40’ containers with max. gross weight of 67,200 lbs.-Dimensions are 19’4⅛”L x 7’8½”W x 7’10⅛”H

4) Pallets are 4’9”x3’5” and hold 5,000 E-padd units.

Case 1

Mistakes were made, answers were compromised.

Case 1

Inventory Level

$$$$$

Case 1

Case 1

Case 1Correct Answers:

1) 65,000 units can be shipped on each 40’ container.

2) The 40’ container is Weighed Out at 13 pallets, as gross limit of 67,200 lbs. is reached before Cube Out.

3) (See Sawtooth graph)

4) 4 total containers are needed (including the one which arrived on Day “0”) to support 60-day demand.

5) 30,010 units are on hand at Day 30 (End of Month 1).

6) 60,020 units are on hand at Day 60 (End of Month 2).

Case 2

Seattle-HDDS

China-Base Units

LA-Memory Modules

LA Dallas Dallas DallasLA LANY NY NY

2 week lead time

2 week lead time

8 week lead time

Sales should note that it takes 6 days on average to get to customer (large order additional 8 weeks). Parameters from 1 day to 12 days.

Case 2

CL-03-08 CL-09-16 CL-18-32

Month 1 100 335 22

Month 2 85 278 8

Month 3 130 307 12

Forecasted Month 4 110 302 13

Forecasted Month 5 110 302 13

Forecasted Month 6 110 302 13

Forecasted Module Shipment

Case 2

Month 4-6 Forecasted Shipments

CL-03-08 CL-09-16 CL-18-32

DC LA 39 112 5

DC Dallas 18 35 2

DC NY 55 156 7

Case 2

DC LA CL-03-08 CL-09-16 CL-18-32

Base Unit 39 112 5

3 TB HDD 39 336 30

8 GB Module 39 224 20

Weighted average forecasted component requirements.

Case 2

DC Dallas CL-03-08 CL-09-16 CL-18-32

Base Unit 18 35 2

3 TB HDD 18 105 12

8 GB Module 18 70 8

Weighted average forecasted component requirements.

Case 2

DC NY CL-03-08 CL-09-16 CL-18-32

Base Unit 55 156 7

3 TB HDD 55 468 42

8 GB Module 55 312 28

Weighted average forecasted component requirements.

Case 2

Month 4 Actual CL-03-08 CL-09-16 CL-18-32

DC LA 50 150 3

DC Dallas 12 25 1

DC NY 35 100 4

Divert components to DC LA to ship to customer at 78% margin less 12% = 66%

Case 3

40,000 units can be shipped on each 20’ container 50 cases x 100 units per case = 5000 units5000 units x 8 since 8 pallets will fit in each container

The container is cubed out since it has reached its volume capacity before it has reached its weight limit.

Inventory Cycle

To reach 100,000 units in 2 months with no stockouts 4 containers need to be delivered to Long Beach. Since 40,000 units can be shipped per container 40,000 x 4 = 160,000

Long BeachSeoul, Korea

Case 3

The ending inventory number on the last day of the first month of shipments is 45,010 units

The ending inventory number on the last day of the second month of shipments is 25,020

The three 40’ containers costs $10,500 to ship vs. The four 20’ containers cost $11,000 to ship Three 40’ containers are more economical (although inventory costs are higher).

The most economical scenario is to receive one 40’ container for 65000 units on Monday, Day 22 Receive 20’ containers for 40,000 units (each) on Monday, Day 36 and Monday, Day 50 as seen in the next slide.

Case 3

Case 3

The most economical scenario is to:

Receive one 40’ container for 65,000 units on Monday, Day 22.Receive 20’ containers for 40,000 units (each) on Monday, Day 36 and Monday, Day 50

Case 3

Case 4

Kunshan, China

Shanghai, China

Long Beach,USA

Chicago,USA

Shipping Dog Food

FromTo

INCOTERMS

Definition Responsible for Freight

Owns in Transit Liable for Damage

Seller Loads, Delivers, Pays Freight, and Insures to named port (Long Beach)

Seller Seller Seller

Seller Responsibility ends at Buyer Pickup location (Kunshan)

Buyer Buyer Buyer

Seller Clears for Export, Loads and Delivers to named location (Shanghai)

Buyer Buyer Buyer

Seller clears for Export, Delivers to Carrier, Buyer Pays Freight, is Liable to Destination

Buyer Buyer Buyer

Seller Pays Freight, is Liable to named Destination, Ready to Unload

Seller Seller Seller

EXW

CIF

FOB

FCA

DDP

Shipping and Packaging Symbols

Summary of Topics Learned

● Forecasting and inventory management● Identifying the most efficient method of

transportation● Ownership of goods with different incoterms● Translation of common packing symbols ● Greater understanding of real world logistics

Any Questions?