Posted: September 7th, 2016

Map and draw the existing supply network, as well as calculate the annual cost associated with running the existing system

Questions to be addressed:
1. Map and draw the existing supply network, as well as calculate the annual cost associated with running the existing system? (5 marks)
Note: In the existing system 40% of the volume arrives in Seattle and 60% in Los Angeles. All material is transferred to the Kansas City distribution centre by rail, where it is unloaded and quality checked. All volume is then transferred by truck to the nine existing warehouses in the US.
2. Map and draw the new supply network as a result of the changes made in the case and calculate the annual cost associated with running the upgraded system? (5 marks)
Note: In the new system, the Los Angeles warehouse is upgraded to include a distribution centre capable of processing all the volume coming into the US. Containers coming into Seattle would be inspected by federal officials (it needs to be done at all port locations) and then immediately shipped by rail in their original containers to Los Angeles. All volume would be unloaded and quality checked in Los Angeles. 18% of the volume would then be kept in Los Angeles for distribution through that warehouse and the rest transhipped by rail to the Kansas City warehouse. The material sent to Kansas City would not need to go through another “quality check” and would be directly stored to supply the eight remaining warehouses in the US.
3. In an essay format analyse the US supply network and explain what other SSCM strategies can be applied to optimise network costs? Using Linear/Integer or other Programming mathematical problem solving techniques research other distribution cost and network design methods and determine answers to some of the following questions Eg. What would the optimum location for the warehouses and distribution centres be? Should the new Los Angeles distribution centre be added as a new node in the network? Is this strategically something that ABC should do? What factors have ABC not considered that might be important in moving strategically to the new SC configuration, base your arguments on academic evidences of concepts or practices that can be applied in coming up with an optimal network design and then mapping out new solutions? (5 marks)

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