Case Study.pptx
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This case study examines reducing transportation costs through strategic warehouse placement. It details that each plant produces a single material type except plant 4, which produces types 4 and 5. The current total quarterly transportation cost is $75,031,219.44. Placing warehouses at locations 8, 13, 17, and 25 can satisfy over 80% of demand within a 500-mile radius. With warehouses, the quarterly transportation cost is reduced to $32,742,243.10, saving more than half of the original costs and allowing more timely deliveries to farther customers.
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Case Study.pptx
- 1. Case study
- 2. Initial plant and customers
- 3. Given Details Each plant produces only 1 type of materials except plant 4, which produce type 4,5 Total transportation cost for each quarter = 75031219.44
- 4. Warehouse location stratergy By Placing warehouse at locations 8, 13, 17, 25 we can satisfy more than 80% of the demand within 500 miles of radius
- 5. Total Savings in Transportation cost Total transportation Cost without warehouses= 75,031,219.44 (Quarterly) More time for some of the customers which are far away from the plant Total transportation cost by placement of warehouses= 32,742,243.10 (Quarterly) Stock can be stored and then sent
- 6. Conclustion More than half transportation cost can be saved by placement of Warehouses each quarter by just placing 4 warehouses. Timely delivery of products can be done to customers.