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LYF Consulting
 

LYF Consulting

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Presentation for Business Processes (Year 3 Term 1)

Presentation for Business Processes (Year 3 Term 1)

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    LYF Consulting LYF Consulting Presentation Transcript

    • LYF will guide you home
    • Today’s Agenda The client Killiney Kopitiam The product and current policy Bandung Order Flow The problem Inventory issues and the current system Proposed solution The Wagner Whitin Algorithm Comparison with current system Recommendation and Conclusion
    • The Client
    • Killiney Kopitiam Palm Valley Café Pte. Ltd. SMU Branch S.K. Lee Managing Director Employees
    • The Extended Concept Customer is King. Customer Feedback Serve the Customers And Suggestions Change/Expand Menu
    • The Product and Current Policy
    • Bandung Uses special Nestle milk $1.20/cup 60% milk 40% rose syrup + water
    • Current Demand Demand 1st Week 2nd 3rd 4th Week Week Week
    • Order Process Flow Order Details Estimate Sales Preparation Demand Manual Stock Order via Phone Check Order Fulfillment
    • ?
    • Problem Analysis Opportunity Cost of Storage 2 boxes every 2 weeks Increasing customers High Order Cost ONLY Nestle milk $20 delivery charge Min. order of 1 box (6 packets)
    • Current System t 1 2 3 4 Dt 5 6 6 6 Qt 12 0 12 0 It 7 1 7 1 Setup cost $20.00 $0.00 $20.00 $0.00 Monthly Total Holding cost $4.27 $4.27 $4.27 $4.27 $108.32 Sub-Total $49.89 $4.27 $49.89 $4.27
    • The Proposed Solution
    • Assumptions Setup Cost = Delivery Cost (fixed) Holding Cost Unquantifiable labor cost Electricity Cost from Beverage-Air fridge (1.2 kWh) 21.15 cents/kWh (Singapore Power) Production Cost (opportunity cost) 1 packet of milk (5.67 liters) = $5.67 - 1 box with 6 packets = $34.02 Interest Rate 3.5% per annum (DBS) Deterministic Demand
    • $4.27 Holding Cost (interest rate per week * production cost) + Electricity Cost
    • The Power of Whitin Wagner Whitin Input Output Algorithm Assumptions The Proposed And Given Data Solution
    • Cost Comparison $84.27 $108.32 Current Wagner Whitin System Optimal Solution
    • 22%
    • Current System vs. Wagner Whitin
    • Order Quantity MILK MILK MILK Current Wagner Whitin System
    • Storage MILK MILK MILK Current Wagner Whitin System
    • Order Frequency Current Wagner Whitin System
    • Summary of Benefits ↓Opportunity cost of storage ↑Cost savings of $24.05 ↑Flexibility
    • Recommendations 1 Box | Week | Compartment
    • Conclusion Proposed Consultation Fee Looking forward SMU Law School S.K. Lee’s Comments
    • Q&A