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OPIM 321 Supply Chain Management
Supply Chain Game

Team: Pichonkun
Team Members: Joel Tang, Keh Jing Ren, Luo Dachuan

Strategies Employed

Breakeven Analysis
Factory| Warehouse| Customer| Cost|  |  | Sale?|
Calopeia (Mail)| Calopeia| Calopeia| a.1000+1500/150+150+150| =| 1310|  | | | Same Continent| b.1000+1500/150+150+200| =| 1360|  | | | Fardo| c.1000+1500/150+150+400| =| 1560| No sale | Calopeia (Truck assuming Q=200)| Calopeia| Calopeia| d.1000+1500/150+75+150| =| 1235|  Minimum!| | | Same Continent| e.1000+1500/150+100+200| =| 1310|  | | | Fardo| f.1000+1500/150+225+400| =| 1635| No sale | | |  |  |  |  |  |

Calopeia (Mail)| Same continent| Same as Warehouse| g.1000+1500/150+200+150| =| 1360|  | | | Differs from Warehouse| h.1000+1500/150+200+200| =| 1410|  | | | Fardo| i.1000+1500/150+200+400| =| 1610| No sale| Calopeia (Truck assuming Q=200)| Same continent| Same as Warehouse| j.1000+1500/150+100+150| =| 1260|  | | | Differs from Warehouse| k.1000+1500/150+100+200| =| 1310|  | | | Fardo| l.1000+1500/150+100+400| =| 1510| No sale| Calopeia (Mail)| Fardo|  |  |  |  |  |

| | Other Continent| m.1000+1500/150+400+400| =| 1810| No sale| | | Fardo| n.1000+1500/150+400+150| =| 1560| No sale| Calopeia (Truck assuming Q=200)| Fardo|  |  |  |  |  | | | Other Continent| o.1000+1500/150+225+400| =| 1635| No sale| | | Fardo| p.1000+1500/150+225+150| =| 1385|  |

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Demand Forecast for Countries
Average daily demand based on data : Calopeia 42 drums
Tyran 15.6 drums
Entworpe 11.6 drums
Fardo: 14.1 drums

Historical demand provided in the game information and it was stated that demand stabilized in the last 90 days. We used this information to forecast the demand in helping us determining whether or not to build factories or warehouses in the separate countries as shown in the analysis below.

In our forecasted sales, we will exclude the days taken to expand capacity, build and truck the first shipment, and the final 30 days. When calculating marginal savings in cost, we always assume that we truck at the optimal quantity of 200. Thus, as long as a factory and warehouse are built, cost in meeting demand in that home country will at the game minimum of $1235. Before the game, our group has utilized Microsoft Excel to plot the various demand graphs based on historical data (Day 640 - Day 730) to forecast the future demand.

Figure 1: Forecast of Demand in Sorange

From Figure 1, our group recognizes that the demand in Sorange increases upward increasing linear trend. From this, we abstracted the equation to compute the future demand. We started only from day 640 as that when demand stabilized. We also put the first day as 800 as we allow for the warehouse to be built in 60 days and the factory to be in production for 10 days before we can ship out to meet customers demand. For example, we have calculated that demand for Day 1000 = 0.152 (1000+100) + 0.098 = 167.298 y = 0.152x + 0.098

y (dependent variable) represents our demand while x (dependent variable) represent the day at which the demand will occur.

Decision To Build New Warehouse
Our first decision is to decide if a country needs a warehouse. In doing so, we compare it with the cost if the demand was met from the Calopeia factory and warehouse. We always aim to fulfill demand so capacity expansion will be equal regardless of our capital investments. Thus, we do not factor in the cost of capacity expansion in determining the break even quantity. FARDO: To determine if we should build a warehouse in Fardo, we have to see if it makes economic sense to even meet demand in Fardo cause if not, we would not meet demand there since we would incur a loss. We...
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