Reference no: EM132312298 , Length: word count:5000
1 Background
Dronautics Ltd., a drone manufacturer operating across three manufacturing sites across Australia, has experienced a big surge in demand for their products over the past few years. Table1shows the current year's demand information for 12 markets across Australia.
Dronautics is currently manufacturing in Cairns (QLD), Darwin (NT), and Mandurah (WA). There are two distribution centers in its supply network, one in Adelaide (SA), and one in Newcastle (NSW). The company demands all products to go though the distribution centers for operational consistency.
2 Transportation Options
While Dronautics was able to ramp up their production for the demand, the management team realized that the current transportation network is costing too much, as products
|
Region
|
Demand
|
State(s)
|
|
Sydney
|
50,230
|
New South Wales
|
|
Melbourne
|
49,360
|
Victoria
|
|
Brisbane
|
24,630
|
Queensland
|
|
Perth
|
20,590
|
Western Australia
|
|
Adelaide
|
13,460
|
South Australia
|
|
Gold Coast-Tweed Heads
|
6,790
|
Queensland/New South Wales
|
|
Newcastle-Maitland
|
4,870
|
New South Wales
|
|
Canberra-Queanbeyan
|
4,580
|
Australian Capital Territory/New South Wales
|
|
Sunshine Coast
|
3,330
|
Queensland
|
|
Wollongong
|
3,020
|
New South Wales
|
|
Geelong
|
2,680
|
Victoria
|
|
Hobart
|
2,330
|
Tasmania
|
Table 1: Number of drones demanded across 12 Australian markets.
Per Pallet ($) Per Unit ($)
|
|
Adelaide
|
Newcastle
|
|
Adelaide
|
Newcastle
|
|
Cairns
|
790.00
|
660.00
|
|
6.00
|
5.00
|
|
Darwin
|
530.00
|
920.00
|
|
4.00
|
7.00
|
|
Mandurah
|
790.00
|
1,190.00
|
|
6.00
|
9.00
|
Table 2: Pallet and unit transportation costs from plants to distribution centers.
| |
Per Pallet ($)
|
|
Per Unit ($) |
|
|
Adelaide
|
Newcastle
|
|
Adelaide
|
Newcastle
|
|
Sydney
|
530.00
|
130.00
|
|
4.00
|
1.00
|
|
Melbourne
|
460.00
|
530.00
|
|
3.50
|
4.00
|
|
Brisbane
|
590.00
|
330.00
|
|
4.50
|
2.50
|
|
Perth
|
860.00
|
1,060.00
|
|
6.50
|
8.00
|
|
Adelaide
|
70.00
|
590.00
|
|
0.50
|
4.50
|
|
Gold Coast-Tweed Heads
|
590.00
|
330.00
|
|
4.50
|
2.50
|
|
Newcastle-Maitland
|
590.00
|
70.00
|
|
4.50
|
0.50
|
|
Canberra-Queanbeyan
|
460.00
|
200.00
|
|
3.50
|
1.50
|
|
Sunshine Coast
|
660.00
|
400.00
|
|
5.00
|
3.00
|
|
Wollongong
|
530.00
|
200.00
|
|
4.00
|
1.50
|
|
Geelong
|
460.00
|
530.00
|
|
3.50
|
4.00
|
|
Hobart
|
1,320.00
|
1,580.00
|
|
10.00
|
12.00
|
Table 3: Pallet and unit transportation costs from distribution centers to markets. used to be transported in individual units.
Dronautics decides to use pallets when possible. For those drones that are not packed into a pallet, they will be individually transported throughout the supply network as before. The shipping costs for pallets are much more attractive, as there are no additional handling, shrinking wrapping, and manual operations involved. Once a drone is shipped in pallets, they will remain in pallets until arrive final destinations. A standard pallet holds 240 drones.
Tables2and3list the transportation costs for one pallet and one unit between the plants and the distribution centers, and between the distribution centers and the markets.
3 Manufacturing Planning
Currently the unit production costs (excluding materials and components) across the three manufacturing plants are $43/unit in Cairns, $40/unit in Darwin, and $42/unit in Man- durah.
Based on the new transportation options available, Dronautics wants to know how many units to produce at each manufacturing site, and the corresponding distribution across its supply network.
4 Production Relocation
At the same time, Dronautics is also considering relocating its production facilities, as all three plants are not close to major markets. It was proposed that one new manufacturing facility to be opened and co-locate with one of the distribution centers. By doing so, Dronautics will be able to leverage the manufacturing economy of scales and be more responsive to market demand.
If a drone is to be produced at the new facility, the unit production cost will be $33 in Adelaide, and $32 in Newcastle, as a result of consolidation of manufacturing activities. The new manufacturing facility will cost $1.5 million annually to operate over its designed lifespan. With the co-location, products will be directly shipped out of the manufacturing facility. Dronautics will continue to use the pallets when possible. The existing manufac- turing facilities will be use to manufacture other products.
5 Tasks
You will be using network optimization techniques, and based on the models you construct- ed, to answer the questions like the following ones (but you are not limited to those):
1. The manufacturing plans at Cairns, Darwin, and Mandurah, the three manufacturing sites.
2. The distribution network and the associated flows over the whole network.
3. How rational is the policy that products have to go through the distribution centers? If this could be changed, what changes you would like to propose? What results you would expect to see?
4. How much will be the cost difference, if breaking down of pallets (i.e., taking products from fully packed pallets) is allowed?
5. Assess whether it will be worthwhile if Dronautics relocates its production to either Adelaide or Newcastle.
6. If the production relocation is profitable, which site should be chosen? How much would be the cost saving? If the production location is not profitable, by how much should the annual operating cost reduce so that it will be attractive to Dronautics again?
7. Discuss the impact of production relocation to cycle and safety stocks, try to pick appropriate parameters to estimate the effect.
8. Construct at least one other possible scenario, and discuss your findings.
When addressing the above questions, please address each one individually. If you need or want to address the combined effects of any two (or more) of the above, please clearly mention it in your report.
Attachment:- Supply Chain Modeling.rar