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Assessment 1: (Individual)- Consists of three parts

Intent: The purpose of this assignment is to enable students investigate, analyze and critique a process that allows decision making for optimizing logistics supply chain design at the tactical level which includes global logistics and distribution and warehousing design features. This may include utilizing linear programming techniques for optimizing supply chain networks. See UTS Online for detail.

Objective(s):

This addresses Subject Learning Objectives – 3 and 4

This develops Program Learning Objective 1.1 and 2.2

Weighting: 40%

Due: 8th May by 11.59 PM to be submitted utsonline via Turnitin

Assessment 1- Part A– Case study-1- Supply chain design of X & Co.

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Designing the Production Network at X & Co.

Mr Johnson, vice president of supply chain at x & co. thought that his current production and distribution network was not appropriate given the significant increase in Transportation costs over the past few years. Compared to when the company had set up its production facility in Chicago, Transportation costs had increased by a factor of More than four and were expected to continue growing in the next few years. A quick decision on building one or more new plants could save the company significant Amounts in Transportation expense in the future.

X & Co.

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X & was founded in the late 1970s and produced baby wipes and diaper ointment. Demand for the two products was as shown in Table 1. The company currently had one

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factory in Chicago that produced both Products for the entire country. The wipes line in the Chicago facility had a capacity of 5 million units, an annualized fixed cost of $5 million a year, and a variable cost of $10 per unit. The ointment line in the Chicago facility had a capacity of 1 million units, an annualized fixed cost of $1.5 million a year, and a variable cost of $20 per unit, the current transportation costs per unit (for both wipes and ointment) are shown in Table 2.

New Network Options

Johnson had identified Princeton, Chicago; Atlanta; and Los Angeles as potential sites for new plants. Each new plant could have a wipes line, an ointment line, or both. A new wipes line had a capacity of 2 million units, an annual fixed cost of $2.2 million, and a variable production cost of $10 per unit. A new ointment line had a capacity of 1 million units. An annual fixed cost of $1.5 million, and a variable cost of $20 per unit. The current transportation cost per unit are shown in Table 2. Johnson had to decide whether to build a new plant and if so, which production lines to put into the new plant.

Assessment 1- Part B– Case Study-2- Managing Growth at Y & Co.

In December 2008, Mr. Thomson and his management team were busy in evaluating the performance at Y & co. over the previous year. Demand had grown by 80 percent. This growth, however, was a mixed blessing. The venture capitalists supporting the company were very pleased with the growth in sales and the resulting increase in revenue. Thomson and his team, however, could clearly see that costs would grow faster than revenues if demand continued to grow and the supply chain network was not redesigned. They decided to analyze the performance of the current network to see how it could be redesigned to best cope with the rapid growth anticipated over the next three years.

Y & Co.

Thomson founded Y &Co. in 2004 with a mission of supplying parents with more affordable sports equipment for their children. Parents complained about having to discard expensive skates, skis, jackets, and shoes because children outgrew them rapidly. Thomson’s initial plan was for the company to purchase used equipment and

Jackets from families and any surplus equipment from manufacturers and retailers and sell these over the Internet. The idea was well received in the marketplace, demand grew rapidly, and by the end of 2004, the company had sales of $0.8 million. By this time, a variety of new and used products were being sold, and the company received significant venture capital support.

In June 2004, Thomson leased part of a warehouse in the outskirts of St. Louis to manage the large amount of product being sold. Suppliers sent their product to the warehouse. Customer orders were packed and shipped by UPS from there. As demand grew, Y & Co. leased more space within the warehouse. By 2007, Y & Co. leased the entire warehouse and orders were being shipped to customers all over the United states. Management divided the United States into six customer zones for planning purposes. Demand from each customer zone in 2007 was as shown in Table 1. Thomson estimated that the next three years would see a growth rate of about 80 percent per year, after which demand would level off.

Assessment 1- Part C– Thought leadership- Every student needs to participate and present thought leadership dialogue. In this regard you need to attend leadership dialogue as part of a group consisting of three members. Prepare thought leadership dialogue based on lecture topic. Two groups will be in dialogue and debate before each lecture (based on lecture topic). Total time allocated for each thought leadership dialogue session is 15 minutes + 5 minutes for question and answer session. Mark allocation will depend on how engaging and participating is your session. Therefore apply innovative tools and techniques to ensure more engagement and participation of class.