Supply Chain Game Round 2. G MATERI 101 Updated Notes

Supply Chain Game Round 2. G MATERI 101 Updated Notes Supply Chain Game Round 2 Edit 00 4 … Initial Analysis We began our initial analysis by reviewing the instructions in detail. We wanted to be sure that we didn ...

Supply Chain Game Round 2. G MATERI 101 Updated Notes Supply Chain Game Round 2 Edit 00 4 … Initial Analysis We began our initial analysis by reviewing the instructions in detail. We wanted to be sure that we didn't miss any costs like we did in the first round. Right away we could see that, while the basic game was the same, Round 2 was a much more complicated affair. Now we had to consider five different markets four our product, each with different demand characteristics, though the final selling price in each market was the same. This table summarizes the characteristics of each market Region Use Demand Trend Avg Demand Avg Order Size Calopeia Air Conditioners Seasonal-stable 39 8 Sorange Hardwood floorsIncreasing-linear 10 8 Tyran Appliances Not seasonal-level 19 8 Entworpe Insulation Not seasonal-level 8 250 Fardo Airplanes Not seasonal-level 15 8 As in the first round we begin the game on day 731 with one factory and one warehouse, both located in Calopeia. The factory has an initial daily capacity of 70 and is currently only serving the Calopeia market. While the product sale price does not vary, the cost to bring the product to market does vary by region, depending on the location of both the factory and the warehouse. The highest possible profit per unit is made if both the factory and warehouse are located within the region they serve. For a batch size of 200, the maximum potential profit can be calculated as follows (assuming 3 day manufacturing time): Production Cost $1000 per drum plus $1500 fixed setup cost $1007.50 Freight to Warehouse $15,000 per truckload $75 Holding Cost $0.27 per day. Minimum 10 days $2.70 Lost Interest 10% annually. Minimum 10 days $3.00 Outbund Shipping $150 per drum $150 Total Cost $1238.20 Available Profit $211.80 Using this number, we can further calculate the potential per unit profit for other factory/warehouse configurations. Considering the 4 mainland regions, additional cost of $75 per unit is incurred if both the factory and warehouse are located in a different region than the market served. If only the factory is located in a different region, but the warehouse is located within the market region, then the additional cost is only $25 per unit.