supply chain - project
TRANSCRIPT
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NASS NASS Bottle DecoratorsBottle Decorators
Cost AnalysisCost Analysisbyby
Ayesha, Neha, Shuen, SyedAyesha, Neha, Shuen, Syed
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Our MissionOur Mission
To find optimal quantity points to, To find optimal quantity points to, maximize profitmaximize profit
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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
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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
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The Production The Production ProcessProcess
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Spray DecorationSpray Decoration
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Print DecorationPrint Decoration
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Label DecorationLabel Decoration
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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.)
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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
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Cost StructureCost Structure
60.030Labeling
90.023Print
90.041Spray
LaborCost per Bottle
Operation
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Decision VariablesDecision Variables
Quantity of Sprayed BottlesQuantity of Sprayed Bottles
Quantity of Printed BottlesQuantity of Printed Bottles
Quantity of Labeled BottlesQuantity of Labeled Bottles
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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$2.4/bottle
LabelingPaintSpray
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ConstraintsConstraints
0 <= labor hours <= 3840 hours 0 <= labor hours <= 3840 hours 0<= machine hours <=480 hours0<= machine hours <=480 hours 0<= Qs + Qp + Ql <= 142,758 bottles0<= Qs + Qp + Ql <= 142,758 bottles 0<=.7Qp + .1Ql<= 230000<=.7Qp + .1Ql<= 23000 0<=.08Qs + .02Qp<=50000<=.08Qs + .02Qp<=5000 0<=.02Qs + .005Ql<= 38,5240<=.02Qs + .005Ql<= 38,524
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Excel SetupExcel Setup
385241441.675<=0.0050.02Constraint 6
50005000<=0.020.08Constraint 5
2300022998.3<=0.10.7Constraint 4
142758142758<=111Constraint 3
480318.07<=0.0020.0010.003Constraint 2
3840839.45<=0.00690.00790.0039Constraint 1
Subject To
286270.8Max1.681.922.40Obj.
Function
622912395656511Var Values
RHSValueLabelin
gPaintSprayOperation
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Answer ReportAnswer Report
0Binding$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)
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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
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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
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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
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Questions?Questions?