Logistics and Supply Chain Management

Published on May 2016 | Categories: Documents | Downloads: 95 | Comments: 0 | Views: 719
of 23
Download PDF   Embed   Report

Comments

Content

Logistics and Supply Chain Management

Logistics
‡ The process of planning, implementing, and controlling the efficient, cost-effective flow and storage of goods, services, and related information, from point of origin to point of consumption, for the purpose of conforming to customer requirements. ‡ Components of an Integrated Logistics System
± Physical Supply: links suppliers to operations process ± Internal Operations: manages in-process material flow ± Physical Distribution: links operations process to customers

Transportation and storage of inventory
Coal mining Raw Material Finished Goods Limestone mining Finished Goods Iron ore mining Raw Material Raw Material Raw Material Auto body stamping Finished Goods Raw Material Steel making Chassis building Finished Goods Finished Goods Finished Goods Raw Material Raw Material

Auto assembly

Finished Goods

Dealers

Customers

Supply Chain Management
‡ A philosophy that describes how organizations should manage their supply chains to achieve strategic advantage ‡ The objective is to synchronize requirements of the final customer with the flow of materials and information along the supply chain. The goal is to eliminate variability and reach a balance between high customer service and low cost

SCM: the need to reduce variability or the impact of variability on the supply chain
‡ Supply network variability
± late deliveries: weather,equipment breakdown ± quality problems

‡ Manufacturing process variability
± machine reliability and equipment failure ± changeovers / setups / part expediting ± design and quality problems Carrying safety ‡ Customer network variability inventories are the ± cancellations and irregular orders most common ± equipment failure approach to dealing with variability ± scheduling

Information Technology in SCM
‡ Seen as the key to variability reduction ‡ Links the success of independent suppliers, manufacturers, and customers ‡ Risks and rewards are shared among supply chain partners ‡ Many technologies are accepted among supply chain managers
± ± ± ± Electronic data interchange (EDI) Artificial intelligence / Expert systems Bar code and radio frequency systems Internet applications

Environmental Sensitivity
‡ NOW: Supply chains create tremendous amounts of waste material to protect goods in shipment and storage. ‡ FUTURE: Distribution will use reverse logistics, the recycling or proper disposal of cardboard, packing material, strapping, shrink wrap, pallets, etc...

Two major problems in supply chain management
1. 2. How to synchronize to eliminate expensive decoupling inventory How to reduce transportation costs.

A study by A.T. Kearney & Company provides the average distribution cost (as a percentage of sales) across 270 companies. Functional Activity Administration Transportation : Inbound Outbound Receiving and shipping Packaging Warehousing Inventory carrying cost: Interest Taxes, insurance, obsolescence Or der processing Total % of sales 2.4 2.1 4.3

6.4 1.7 2.6 3.7 2.2 3.8 1.2 21.8%

1.6

Supply Chain Synchronization and Linear Programming
The Transportation Problem: a general formulation of a class of problems related to the supply and distribution of goods and services across a network. Generally, the transportation problem is concerned with the most cost effective (or cost minimizing) way to supply several demand locations (nodes) from more than one supply location (nodes)

Example

Special transportation concerns: Route (or arcs) that have a maximum capacity Routes that cannot be traversed

The Transshipment Problem: a more generalized version of the transportation problem in which intermediate, transship ment, nodes are added to the network. Transshipment nodes are often used to model warehouses, material transfer locations, or junctions for mixed mode delivery of goods and services.

Example

Special transshipment concerns: Backwards or sidewards movement in the network Capacity limitations of the transshipment nodes

Quaker Oats has begun manufacturing, in two of its plants, a new granola product made of three parts oats, two parts raisins and one part almonds. Two oat vendors and two almond vendors have been identified, but only one reliable vendor of raisins could be found. The supply of raw materials and the shipped costs are provided Vendor Oat 1 Oat 2 Raisin Almond 1 Almond 2 Supply in tons 25,000 30,000 50,000 9,000 10,000 Cost to Plant 1 $100 $105 $550 $1,050 $1,200 Cost to Plant 2 $110 $95 $525 $1,150 $1,100

Quaker ships to three distribution facilities. The shipping cost of completed (6-ton) pallets of product and the demand at each distribution facility are provided Hannaford Plant 1 Plant 2 Demand $100 $95 2,500 Quaker $65 $70 5,000 WalMart $90 $90 10,000 Plant Capacity 9,500 8,500

Formulation
Minimize Z= 100O1Q1+110O1Q2+105O2Q1+95O2Q2+550RQ1+525R Q2+1050A1Q1+1150A1Q2+1200A2Q1+1100A2Q2+100Q 1H+65Q1D+90Q1W+95Q2H+70Q2D+90Q2W C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 1O1Q1+1O1Q2<=25000 1O2Q1+1O2Q2<=30000 1RQ1+1RQ2<=50000 1A1Q1+1A1Q2<=9000 1A2Q1+1A2Q2<=10000 1Q1H+1Q2H>=2500 1Q1D+1Q2D>=5000 1Q1W+1Q2W>=10000 1O1Q1+1O2Q1-3Q1H-3Q1D-3Q1W=0 1O1Q2+1O2Q2-3Q2H-3Q2D-3Q2W=0 1RQ1-2Q1H-2Q1D-2Q1W=0 1RQ2-2Q2H-2Q2D-2Q2W=0 1A1Q1+1A2Q1-1Q1H-1Q1D-1Q1W=0 1A1Q2+1A2Q2-1Q2H-1Q2D-1Q2W=0 Q1H+Q1D+Q1W<=9500 Q2H+Q2D+Q2W<=8500

Subject To:

Combined Report for Granola
Decision Variable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 O1Q1 O1Q2 O2Q1 O2Q2 RQ1 RQ2 A1Q1 A1Q2 A2Q1 A2Q2 Q1H Q1D Q1W Q2H Q2D Q2W Solution Value 25,000.00 0 2,000.00 25,500.00 18,000.00 17,000.00 9,000.00 0 0 8,500.00 0 5,000.00 4,000.00 2,500.00 0 6,000.00 Unit Cost Total Profit c(j) Contribution 100.0000 110.0000 105.0000 95.0000 550.0000 525.0000 1,050.00 1,150.00 1,200.00 1,100.00 100.0000 65.0000 90.0000 95.0000 70.0000 90.0000 (Min.) = 2,500,000.00 0 210,000.00 2,422,500.00 9,900,000.00 8,925,000.00 9,450,000.00 0 0 9,350,000.00 0 325,000.00 360,000.00 237,500.00 0 540,000.00 44,220,000.0000 Slack Surplus 0 2,500.00 15,000.00 0 1,500.00 0 0 0 0 0 0 0 0 0 500.00 0 Shadow Price -5.00 0 0 0 0 2,560.00 2,530.00 2,555.00 105.00 95.00 550.00 525.00 1,050.00 1,100.00 0 -30.00 Allowable Min. RHS 22,500.0000 27,500.0000 35,000.0000 9,000.0000 8,500.0000 1,833.3330 4,333.3340 9,333.3330 -2,000.0000 -25,500.0000 -18,000.0000 -17,000.0000 -9,000.0000 -8,500.0000 9,000.0000 8,500.0000 Allowable Max. RHS 27,000.0000 M M M M 2,500.0000 5,000.0000 10,000.0000 2,500.0000 2,500.0000 15,000.0000 15,000.0000 0 1,500.0000 M 9,166.6670 Reduced Cost 0 20.0000 0 0 0 0 0 50.0000 150.0000 0 5.0000 0 0 0 5.0000 0 Basis Status basic at bound basic basic basic basic basic at bound at bound basic at bound basic basic basic at bound basic Allowable Allowable Min. c(j) Max. c(j) -M 90.00 100.00 -M 535.00 -M 1,020.00 1,100.00 1,050.00 -M 95.00 -2,465.00 85.0000 -2,465.00 65.00 85.00 105.0000 M M 105.0000 M 540.0000 1,200.0000 M M 1,130.0000 M 70.0000 95.0000 100.0000 M 95.0000

Objective Function Const 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16

Left Hand Right Hand Side Direction Side 25,000.00 <= 27,500.00 <= 35,000.00 <= 9,000.00 <= 8,500.00 <= 2,500.00 >= 5,000.00 >= 10,000.00 >= 0 = 0 = 0 = 0 = 0 = 0 = 9,000.00 <= 8,500.00 <= 25,000.00 30,000.00 50,000.00 9,000.00 10,000.00 2,500.00 5,000.00 10,000.00 0 0 0 0 0 0 9,500.00 8,500.00

Bullwhip Effect
The magnification of variability in orders in the supply-chain.

Retailer¶s Orders

Wholesaler¶s Orders

Manufacturer¶s Orders

Time

Time

Time

A lot of retailers each with little variability in their orders«.

«can lead to greater variability for a fewer number of wholesalers, and«

«can lead to even greater variability for a single manufacturer.

The Assignment Problem: deals with a managerial decision to assign A resources (or agents) to specific customers (or tasks). Normally, the assignment problem is structured to assign one and only one agent to one and only one task. Example of an assignment problem
A g e nt 1 50 60 90 40 2 80 100 2 Task 1

Special assignment concerns: Multiple assignments The number of agents not equal to the number of tasks

3

30 50 60

3

The Marathon Oil Company operates two refineries, two distribution centers and three tankwaggon shipping points to service its customers in the southeast. Refined crude is shipped from a refinery to a distribution center and finally to a tankwaggon shipping point for final sale to oil distributors. Plant capacities and shipping costs (in $ per gallon) from each refinery to each distribution center (DC) are given below: Refinery Miami Refinery Springfield Refinery Columbia DC .004 .003 Macon DC .006 .008 Capacity 125,000 gals 95,000 gals

Estimated customer demand and per unit shipping costs (in $ per gallon) from each DC to each tankwaggon shipping point ( TWSP) are as follows: Distribution Center Columbia Macon Monthly Demand: Grade I Oil Grade II Oil Charleston TWSP .0016 .0024 20,000 gals 40,000 gals Durham TWSP .0021 .0035 25,000 gals 35,000 gals Carver TWSP .0031 .0022 45,000 gals 20,000 gals

Grade I and II oil consume the same amount of capacity to refine, however; only the Miami refinery is capable of refining Grade I oil.

Network
C1 M1 C2 D1 M2 M1 D2 Ca1 S2 M2 Ca2 Ch1 Ch2

Formulation
Minimize 0.004MC1+0.006MC2+0.004MM1+0.006MM2+0.003SC 2+0.008SM2+0.0016C1CH1+0.0021C1D1+0.0031C1CA 1+0.0016C2CH2+0.0021C2D2+0.0031C2CA2+0.0024M 1CH1+0.0035M1D1+0.0022M1CA1+0.0024M2CH2+0.0 035M2D2+0.0022M2CA2 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 MC1+MC2+MM1+MM2<125,000 SC2+SM2<95,000 -MC1+C1CH1+C1D1+C1CA1=0 -MC2-SC2+C2CH2+C2D2+C2CA2=0 -MM1+M1CH1+M1D1+M1CA1=0 -MM2-SM2+M2CH2+M2D2+M2CA2=0 C1CH1+M1CH1=20000 C2CH2+M2CH2=40000 C1D1+M1D1=25000 C2D2+M2D2=35000 C1CA1+M1CA1=45000 C2CA2+M2CA2=20000

Subject To:

Solution.
Decision Variable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 MC1 MC2 MM1 MM2 SC2 SM2 C1CH1 C1D1 C1CA1 C2CH2 C2D2 C2CA2 M1CH1 M1D1 M1CA1 M2CH2 M2D2 M2CA2 Solution Value 45,000.00 0 45,000.00 0 95,000.00 0 20,000.00 25,000.00 0 40,000.00 35,000.00 20,000.00 0 0 45,000.00 0 0 0 Unit Cost Total Profit c(j) Contri 0.0040 0.0060 0.0040 0.0060 0.0030 0.0080 0.0016 0.0021 0.0031 0.0016 0.0021 0.0031 0.0024 0.0035 0.0022 0.0024 0.0035 0.0022 (Min.) = 180.0000 0 180.0000 0 285.0000 0 32.0000 52.5000 0 64.0000 73.5000 62.0000 0 0 99.0000 0 0 0 1,028.0000 Slack Shadow or Surplus Price 35,000.00 0 0 0 0 0 0 0 0 0 0 0 0 0 -0.0040 -0.0030 -0.0040 -0.0039 0.0056 0.0046 0.0061 0.0051 0.0062 0.0061 Allowable Allowable Min. RHS Max. RHS 90,000.00 95,000.00 -35,000.0 0 -35,000.0 0 0 0 0 0 0 0 M M 45,000.0000 95,000.0000 45,000.0000 20,000.0000 55,000.0000 40,000.0000 60,000.0000 35,000.0000 80,000.0000 20,000.0000 Reduced Cost 0 0.0030 0 0.0021 0 0.0041 0 0 0.0009 0 0 0 0.0008 0.0014 0 0.0017 0.0023 0 Basis Status basic at bound basic at bound basic at bound basic basic at bound basic basic basic at bound at bound basic at bound at bound basic Allowable Allowable Min. c(j) Max. c(j) 0.0031 0.0030 0.0032 0.0039 -M 0.0039 -M -M 0.0022 -M -M 0.0014 0.0016 0.0021 -M 0.0007 0.0012 0.0001 0.0048 M 0.0049 M 0.0051 M 0.0024 0.0035 M 0.0033 0.0044 0.0052 M M 0.0031 M M 0.0039

Objective Function Constrnt 1 2 3 4 5 6 7 8 9 10 11 12 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12

Left Hand Right Hand Side Direction Side 90,000.00 95,000.00 0 0 0 0 20,000.00 40,000.00 25,000.00 35,000.00 45,000.00 20,000.00 <= <= = = = = = = = = = = 125,000.0000 95,000.0000 0 0 0 0 20,000.0000 40,000.0000 25,000.0000 35,000.0000 45,000.0000 20,000.0000

1 2 3 4 5 1 2 3 4 5 7 9 6 8 7 9
1. 2. 3. 4. 5. 6. Inventories and multi-period planning Limitations on shipping quantities Changes in demand Multimode shipping Returns Reverse logistics

6

8

A Multi-Period Transshipment Problem

Transportation and the Traveling Salesman Problem The traveling salesman problem is a special network formulations that requires a heuristic solution for all but the smallest problems. The object of the TSP is to find a network cycle that minimizes the total distance required to visit all nodes once. The nearest neighbor procedure (heuristic) 1. 2. 3. 4. Start with a node (location to be visited) at the beginning of the tour (the depot node). Find the closest to the last node added to the tour. Go back to step 2 until all nodes have been added. Connect the first and last nodes to complete the tour.

Example Use the following symmetric distance matrix to design a tour that minimizes total distance traveled. From Node 1 2 3 4 5 6 To Node (in miles) 2 3 4 5.4 2.8 10.5 5.0 9.5 5.0 7.8 9.5 7.8 5.0 6.0 5.0 8.5 3.6 9.5

1 5.4 2.8 10.5 8.2 4.1

5 8.2 5.0 6.0 5.0 9.2

6 4.1 8.5 3.6 9.5 9.2 -

The Clark and Wright Savings Heuristic
1. 2. Select any node as the depot node (node 1) Compute the savings, Sij , for linking nodes i and j: S ij = c1i + c1j - cij for i and j nodes 2,3,...,n where cij = the cost of traveling from node i to node j Rank the savings from largest to smallest Start at the top of the list, form larger subtours by linking appropriate nodes i and j. Stop when complete tour is formed.

3. 4.

Example

4

1 10 miles 3

2

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close