Case Study 3. cool wipes excel sheet

wipes

ointment variable plant fixed costs variable cost/unit capacity fixed cost cost/unit capacity chicago 5000000 10 2000000 1500000 20 1000000 princeton 2200000 10 2000000 1500000 20 1000000 atlanta 2200000 10 2000000 1500000 20 1000000 los angles 2200000 10 2000000 1500000 20 1000000 regional demand by product upper lower zone northwest southwest midwest midwest northeast southeast wipes 500 700 900 800 1000 600 ointment 50 90 120 65 120 70

northwest southwest chicago 6.32 princeton 6.6 atlanta 6.72 los angles 4.36

upper lower midwest midwest northeast southeast 6.32 3.68 4.04 5.76 5.96 6.6 5.76 5.92 3.68 4.08 6.48 5.92 4.08 4.04 3.64 3.68 6.32 6.32 6.72 6.6

wipes variable upper lower northwest southwest midwest midwest northeast southeast chicago 0 0 900 800 0 0 princeton 0 0 0 0 1000 0 atlanta 0 1.78E-15 0 -3.55E-15 0 6.00E+02 los angles 500 700 0 0 0 0 demand 0 4.49E-07 -1.00E-07 0 0 0

ointment variables upper lower northwest southwest midwest midwest northeast southeast chicago 0 0 120 65 0 0 princeton 0 0 0 0 120 0 atlanta 0 0.00E+00 0 0.00E+00 0 7.00E+01 los angles 50 90 0 0 0 0 demand 0 0.00E+00 0.00E+00 0 0 0

If build a plant in princeton LA or atlanta the cost would be reduced to

29188.8

total 4500 515

fixed

capacity 1 33.. 0.5 -2.30E-09 0.3 0.00E+00 0.6 1.74E-08

fixed

capacity 1 815 0.12 0.00E+00 0.07 0.00E+00 0.14 0.00E+00

wipes ointment variable variable plant fixed costs cost/unit capacity fixed cost cost/unit capacity chicago 5000000 10 2000000 1500000 20 1000000 princeton 2200000 10 2000000 1500000 20 1000000 atlanta 2200000 10 2000000 1500000 20 1000000 los angles 2200000 10 2000000 1500000 20 1000000 regional demand by product upper lower zone northwest southwest midwest midwest northeast southeast total wipes 500 700 900 800 1000 600 4500 ointment 50 90 120 65 120 70 515 transportation costs

upper lower northwest southwest midwest midwest northeast southeast chicago 6.32 6.32 3.68 4.04 5.76 5.96 princeton 6.6 6.6 5.76 5.92 3.68 4.08 atlanta 6.72 6.48 5.92 4.08 4.04 3.64 los angles 4.36 3.68 6.32 6.32 6.72 6.6

wipes variable upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 900 800 0 0 princeton 0 0 0 0 1000 0 atlanta 0 1.78E-15 0 -3.55E-15 0 6.00E+02 los angles 500 700 0 0 0 0 demand 0 4.49E-07 -1.00E-07 0 0 0

1 0.5 0.3 0.6

ointment variables upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 120 65 0 0 1 princeton 0 0 0 0 120 0 0.12 atlanta 0 0.00E+00 0 0.00E+00 0 7.00E+01 0.07 los angles 50 90 0 0 0 0 0.14 demand 0 0.00E+00 0.00E+00 0 0 0

If the transportation costs are to be halved the be

transporta tion cost multiple 0.5

capacity 33.. -2.30E-09 0.00E+00 1.74E-08

capacity 815 0.00E+00 0.00E+00 0.00E+00

osts are to be halved the total cost would be 16947880

wipes ointment variable variable plant fixed costs cost/unit capacity fixed cost cost/unit capacity chicago 5000000 10 2000000 1500000 20 1000000 princeton 2200000 10 2000000 1500000 20 1000000 atlanta 2200000 10 2000000 1500000 20 1000000 los angles 2200000 10 2000000 1500000 20 1000000 regional demand by product upper lower zone northwest southwest midwest midwest northeast southeast total wipes 500 700 900 800 1000 600 4500 ointment 50 90 120 65 120 70 515 transportation costs

upper lower northwest southwest midwest midwest northeast southeast chicago 6.32 6.32 3.68 4.04 5.76 5.96 princeton 6.6 6.6 5.76 5.92 3.68 4.08 atlanta 6.72 6.48 5.92 4.08 4.04 3.64 los angles 4.36 3.68 6.32 6.32 6.72 6.6

wipes variable upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 900 800 0 0 princeton 0 0 0 0 1000 0 atlanta 0 1.78E-15 0 -3.55E-15 0 6.00E+02 los angles 500 700 0 0 0 0 demand 0 4.49E-07 -1.00E-07 0 0 0

1 0.5 0.3 0.6

ointment variables upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 120 65 0 0 1 princeton 0 0 0 0 120 0 0.12 atlanta 0 0.00E+00 0 0.00E+00 0 7.00E+01 0.07 los angles 50 90 0 0 0 0 0.14 demand 0 0.00E+00 0.00E+00 0 0 0

If the transportation costs were doubled it would be better to keep chicago alone as

transporta tion cost multiple 2

capacity 33.. -2.30E-09 0.00E+00 1.74E-08

capacity 815 0.00E+00 0.00E+00 0.00E+00

to keep chicago alone as plant cost would be

86530200

FR0259 FQ8123

- If vice president could design a new network from scratch, the ideal network would be c the upper midwest and northeast regions. - The three cities are at equal distance from eachother, so each plant can work effectively

FR0259 FQ8123

deal network would be chicago-princeton-atlanta as the demands are the highest in

plant can work effectively with eachother and thus decrease transportation costs.

wipes ointment variable variable plant fixed costs cost/unit capacity fixed cost cost/unit capacity chicago 5000000 10 2000000 1500000 20 1000000 princeton 2200000 10 2000000 1500000 20 1000000 atlanta 2200000 10 2000000 1500000 20 1000000 los angles 2200000 10 2000000 1500000 20 1000000 regional demand by product upper lower zone northwest southwest midwest midwest northeast southeast total wipes 500 700 900 800 1000 600 4500 ointment 50 90 120 65 120 70 515 transportation costs

upper lower northwest southwest midwest midwest northeast southeast chicago 6.32 6.32 3.68 4.04 5.76 5.96 princeton 6.6 6.6 5.76 5.92 3.68 4.08 atlanta 6.72 6.48 5.92 4.08 4.04 3.64 los angles 4.36 3.68 6.32 6.32 6.72 6.6

wipes variable upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 900 800 0 0 princeton 0 0 0 0 1000 0 atlanta 0 1.78E-15 0 -3.55E-15 0 6.00E+02 los angles 500 700 0 0 0 0 demand 0 4.49E-07 -1.00E-07 0 0 0

1 0.5 0.3 0.6

ointment variables upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 120 65 0 0 1 princeton 0 0 0 0 120 0 0.12 atlanta 0 0.00E+00 0 0.00E+00 0 7.00E+01 0.07 los angles 50 90 0 0 0 0 0.14 demand 0 0.00E+00 0.00E+00 0 0 0

If the transportation costs are to be half their c total annual cost would be

transporta tion cost multiple 0.5

capacity 33.. -2.30E-09 0.00E+00 1.74E-08

capacity 815 0.00E+00 0.00E+00 0.00E+00

osts are to be half their current value the l annual cost would be 11948860

wipes ointment variable variable plant fixed costs cost/unit capacity fixed cost cost/unit capacity chicago 5000000 10 2000000 1500000 20 1000000 princeton 2200000 10 2000000 1500000 20 1000000 atlanta 2200000 10 2000000 1500000 20 1000000 los angles 2200000 10 2000000 1500000 20 1000000 regional demand by product upper lower zone northwest southwest midwest midwest northeast southeast total wipes 500 700 900 800 1000 600 4500 ointment 50 90 120 65 120 70 515 transportation costs

upper lower northwest southwest midwest midwest northeast southeast chicago 6.32 6.32 3.68 4.04 5.76 5.96 princeton 6.6 6.6 5.76 5.92 3.68 4.08 atlanta 6.72 6.48 5.92 4.08 4.04 3.64 los angles 4.36 3.68 6.32 6.32 6.72 6.6

wipes variable upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 900 800 0 0 princeton 0 0 0 0 1000 0 atlanta 0 1.78E-15 0 -3.55E-15 0 6.00E+02 los angles 500 700 0 0 0 0 demand 0 4.49E-07 -1.00E-07 0 0 0

1 0.5 0.3 0.6

ointment variables upper lower northwest southwest midwest midwest northeast southeast fixed chicago 0 0 120 65 0 0 1 princeton 0 0 0 0 120 0 0.12 atlanta 0 0.00E+00 0 0.00E+00 0 7.00E+01 0.07 los angles 50 90 0 0 0 0 0.14 demand 0 0.00E+00 0.00E+00 0 0 0

If the transportation costs were double their current value the annual productio

transporta tion cost multiple 2

capacity 33.. -2.30E-09 0.00E+00 1.74E-08

capacity 815 0.00E+00 0.00E+00 0.00E+00

alue the annual production cost would be

82007700