supply chain - project
TRANSCRIPT
NASS NASS Bottle DecoratorsBottle Decorators
Cost AnalysisCost Analysisbyby
Ayesha, Neha, Shuen, SyedAyesha, Neha, Shuen, Syed
Our MissionOur Mission
To find optimal quantity points to, To find optimal quantity points to, maximize profitmaximize profit
OverviewOverview
The Supply Chain ProcessThe Supply Chain Process VariablesVariables Decision Variable Decision Variable Objective FunctionObjective Function ConstraintsConstraints Excel setup and answerExcel setup and answer Net profit AnalysisNet profit Analysis ConclusionConclusion
The supply Chain process
Glass Maker
Product Filler
Warehouse
Glass Decorator
Warehouse
Transport Cost
Transport C
ost
Transport Cost
Our Objective:
Optimize cost factors and minimize cost at the Decorator level
Transport C
ost
The Production The Production ProcessProcess
Spray DecorationSpray Decoration
Print DecorationPrint Decoration
Label DecorationLabel Decoration
Fixed Costs/bottleFixed Costs/bottle
Variables used to determine the fixed Variables used to determine the fixed cost/ bottle for spray, print and label cost/ bottle for spray, print and label decorations of bottles:decorations of bottles:
Labor WagesLabor Wages Number of Employees requiredNumber of Employees required Direct Material Costs (Foils, Inks, Direct Material Costs (Foils, Inks,
Paints etc.)Paints etc.)
Eliminated CostsEliminated Costs
Tooling CostsTooling Costs- Fixed amount of equipment required to - Fixed amount of equipment required to complete projectscomplete projects
- Costs paid by customer- Costs paid by customer
Freight CostsFreight Costs - Not part of the production process- Not part of the production process - Costs paid by customer- Costs paid by customer
Cost StructureCost Structure
60.030Labeling
90.023Print
90.041Spray
LaborCost per Bottle
Operation
Decision VariablesDecision Variables
Quantity of Sprayed BottlesQuantity of Sprayed Bottles
Quantity of Printed BottlesQuantity of Printed Bottles
Quantity of Labeled BottlesQuantity of Labeled Bottles
Objective FunctionObjective Function
Maximize Proft of Producing Sprayed, Printed and Maximize Proft of Producing Sprayed, Printed and Labeled bottles:Labeled bottles:
= Q= Qsprayed*sprayed*PPBPPB +Q+Qpainted * painted * PPBPPB +Q+Qlabeledlabeled * PPB * PPB
*ppb= profit per bottle*ppb= profit per bottle
$1.68/bottle$1.92/bottle$2.4/bottle
LabelingPaintSpray
ConstraintsConstraints
0 <= labor hours <= 3840 hours 0 <= labor hours <= 3840 hours 0<= machine hours <=480 hours0<= machine hours <=480 hours 0<= Qs + Qp + Ql <= 142,758 bottles0<= Qs + Qp + Ql <= 142,758 bottles 0<=.7Qp + .1Ql<= 230000<=.7Qp + .1Ql<= 23000 0<=.08Qs + .02Qp<=50000<=.08Qs + .02Qp<=5000 0<=.02Qs + .005Ql<= 38,5240<=.02Qs + .005Ql<= 38,524
Excel SetupExcel Setup
385241441.675<=0.0050.02Constraint 6
50005000<=0.020.08Constraint 5
2300022998.3<=0.10.7Constraint 4
142758142758<=111Constraint 3
480318.07<=0.0020.0010.003Constraint 2
3840839.45<=0.00690.00790.0039Constraint 1
Subject To
286270.8Max1.681.922.40Obj.
Function
622912395656511Var Values
RHSValueLabelin
gPaintSprayOperation
Answer ReportAnswer Report
0Binding$D$8=integer62291Var Values Labeling$D$8
0Binding$C$8=integer23956Var Values Paint$C$8
0Binding$B$8=integer56511Var Values Spray$B$8
37082.35Not Binding$F$17<=$G$171441.675<= Value$F$17
0Binding$F$16<=$G$165000<= Value$F$16
1.7Not Binding$F$15<=$G$1522998.3<= Value$F$15
0Binding$F$14<=$G$14142758<= Value$F$14
161.929Not Binding$F$13<=$G$13318.071<= Value$F$13
3000.546Not Binding$F$12<=$G$12839.45<= Value$F$12
SlackStatusFormulaCell ValueNameCell
Constraints
622910Var Values Labeling$D$8
239560Var Values Paint$C$8
565110Var Values Spray$B$8
Final ValueOriginal ValueNameCell
Adjustable Cells
286270.80profit$F$9
Final ValueOriginal ValueNameCell
Target Cell (Max)
Fixed Operational CostsFixed Operational Costs
Labor = $61317.83Labor = $61317.83Indirect Labor Cost = $44266.67Indirect Labor Cost = $44266.67Utilities = $20237.67Utilities = $20237.67Service and maintenance = $12411.67Service and maintenance = $12411.67Total supplies = 6224.67Total supplies = 6224.67Expenses = 49853.83Expenses = 49853.83
Total = $194,312.30Total = $194,312.30
Net Monthly ProfitNet Monthly Profit
Max Profit – Total Expense = Net Monthly profitMax Profit – Total Expense = Net Monthly profit
$ 286270.80 - $194,312.30 = $91958.5$ 286270.80 - $194,312.30 = $91958.5
Therefore, even after discounting operational Therefore, even after discounting operational expenses, by operating at the derived quantities, expenses, by operating at the derived quantities, the company would make profit of $91958.5 per the company would make profit of $91958.5 per month or $110,3502 annuallymonth or $110,3502 annually
Optimal Quantities for Max profitOptimal Quantities for Max profit
144733Quantity label
12181Quantity Print
59451Quantity Spray
Final ValueName
Net annual profit: $78,501.94 month Net annual profit: $78,501.94 month $942,023.28/year $942,023.28/year
Questions?Questions?