This document analyzes Tesla's plans to launch and distribute its new Model 3 vehicle. It includes:
1. A forecast of Model 3 demand over the next 4 years, predicting sales will grow at 20% annually from 191,436 vehicles in 2017.
2. Use of a gravity model to determine optimal locations for 3 new regional distribution centers based on dealership locations and electric vehicle registration data. The optimal locations were in Hudson, NJ, Fulton, GA and Bronson, MI.
3. An analysis of how distribution centers can efficiently deliver vehicles to dealerships at minimum cost by considering inventory holding costs, order costs and transportation costs.
Tesla Motors Inc. faces increasing competitive pressure as traditional automakers enter the electric vehicle market. An internal analysis found that while Tesla has strong technological resources and competencies in electric vehicle and battery manufacturing, it needs to increase production to meet demand. An external analysis identified opportunities in policies supporting electric vehicles but also threats from new entrants that have larger production capacities. Tesla's strategic position depends on improving its strategy to sustain its competitive advantage and leadership position in sustainable transportation before traditional automakers ramp up electric vehicle production.
1. The document provides a recommendations report for a strategy project that analyzes Tesla Motors and recommends a strategic alliance with Apple Corporation.
2. It identifies Tesla's key issues as high production costs, supply chain management problems, a need to build out infrastructure, reliability issues, political/legal hurdles, and lack of social acceptance for electric vehicles.
3. A qualitative and quantitative analysis is provided for each issue. The best strategic alternative is recommended to be a strategic alliance between Tesla and Apple to help address Tesla's cost and growth challenges through shared resources with Apple.
This document summarizes a consulting project report on Tesla. It identifies Tesla's strategic issues as the lack of charging infrastructure making long distance travel inconvenient and the high price of its vehicles limiting its market. Recommendations include cutting costs through economies of scale, creating state incentive programs, partnering to increase charging infrastructure, and increasing lobbying spending to allow direct sales.
The document summarizes a Consumer Report from May 2013 that compares the Tesla Model S to a vehicle Marty McFly might have chosen in Back to the Future. In 3 sentences:
The Consumer Report from May 2013 featured in the document compares Tesla's all-electric Model S sedan favorably to a vehicle Marty McFly could have chosen instead of the DeLorean time machine in the movie Back to the Future. Tesla's Model S is highlighted as a luxury electric vehicle offering outstanding performance and a package of services. The report presents the Model S as a car that could have fulfilled Marty McFly's futuristic transportation needs had it been available when the movie was made.
A Marketing analysis for TESLA company in DBA program by Cairo University. It discussing how TESLA is competing Electric Vehicle Market and advancing the development of such Sector. In addition, Tesla is taking further steps toward future by inventing futuristic cars and innovative technology.
This document analyzes Tesla and provides a target stock price of $216 per share, an 18.9% discount from the current market price of $256.76. Through discounted cash flow and multiples valuations, the group recommends selling Tesla stock. The summary provides an overview of Tesla's business, products, financial projections, and risks including competition from established automakers and dependence on suppliers. The target price is sensitive to revenue growth and discount rate assumptions.
This document provides a situation analysis and marketing plan for Tesla Motors. It discusses Tesla's mission to accelerate sustainable transport. Key points include:
- Tesla's core competencies are in powertrain and vehicle engineering. It aims to differentiate through technological innovation and customer experience.
- Financial goals include increasing annual revenues and opening a European factory to reach 500,000 cars globally by 2020. Non-financial goals focus on being eco-friendly and engaging customers.
- Competitors include luxury brands like BMW and Audi who are entering the electric vehicle market, as well as other companies offering hybrid or full electric cars. A PESTEL analysis identifies opportunities in government incentives and environmental concerns.
Tesla Motors is developing new electric vehicle models like the Model S sedan and Model X crossover to expand beyond its niche market of high-end electric sports cars. However, Tesla faces competition from established automakers also introducing electric vehicles. Tesla must decide whether to remain a niche manufacturer or try to gain more market share by expanding production. Key issues include maintaining its technological lead, facilitating broader consumer adoption, developing charging infrastructure, and addressing environmental impacts of increased electric vehicle use.
Tesla Motors Inc. faces increasing competitive pressure as traditional automakers enter the electric vehicle market. An internal analysis found that while Tesla has strong technological resources and competencies in electric vehicle and battery manufacturing, it needs to increase production to meet demand. An external analysis identified opportunities in policies supporting electric vehicles but also threats from new entrants that have larger production capacities. Tesla's strategic position depends on improving its strategy to sustain its competitive advantage and leadership position in sustainable transportation before traditional automakers ramp up electric vehicle production.
1. The document provides a recommendations report for a strategy project that analyzes Tesla Motors and recommends a strategic alliance with Apple Corporation.
2. It identifies Tesla's key issues as high production costs, supply chain management problems, a need to build out infrastructure, reliability issues, political/legal hurdles, and lack of social acceptance for electric vehicles.
3. A qualitative and quantitative analysis is provided for each issue. The best strategic alternative is recommended to be a strategic alliance between Tesla and Apple to help address Tesla's cost and growth challenges through shared resources with Apple.
This document summarizes a consulting project report on Tesla. It identifies Tesla's strategic issues as the lack of charging infrastructure making long distance travel inconvenient and the high price of its vehicles limiting its market. Recommendations include cutting costs through economies of scale, creating state incentive programs, partnering to increase charging infrastructure, and increasing lobbying spending to allow direct sales.
The document summarizes a Consumer Report from May 2013 that compares the Tesla Model S to a vehicle Marty McFly might have chosen in Back to the Future. In 3 sentences:
The Consumer Report from May 2013 featured in the document compares Tesla's all-electric Model S sedan favorably to a vehicle Marty McFly could have chosen instead of the DeLorean time machine in the movie Back to the Future. Tesla's Model S is highlighted as a luxury electric vehicle offering outstanding performance and a package of services. The report presents the Model S as a car that could have fulfilled Marty McFly's futuristic transportation needs had it been available when the movie was made.
A Marketing analysis for TESLA company in DBA program by Cairo University. It discussing how TESLA is competing Electric Vehicle Market and advancing the development of such Sector. In addition, Tesla is taking further steps toward future by inventing futuristic cars and innovative technology.
This document analyzes Tesla and provides a target stock price of $216 per share, an 18.9% discount from the current market price of $256.76. Through discounted cash flow and multiples valuations, the group recommends selling Tesla stock. The summary provides an overview of Tesla's business, products, financial projections, and risks including competition from established automakers and dependence on suppliers. The target price is sensitive to revenue growth and discount rate assumptions.
This document provides a situation analysis and marketing plan for Tesla Motors. It discusses Tesla's mission to accelerate sustainable transport. Key points include:
- Tesla's core competencies are in powertrain and vehicle engineering. It aims to differentiate through technological innovation and customer experience.
- Financial goals include increasing annual revenues and opening a European factory to reach 500,000 cars globally by 2020. Non-financial goals focus on being eco-friendly and engaging customers.
- Competitors include luxury brands like BMW and Audi who are entering the electric vehicle market, as well as other companies offering hybrid or full electric cars. A PESTEL analysis identifies opportunities in government incentives and environmental concerns.
Tesla Motors is developing new electric vehicle models like the Model S sedan and Model X crossover to expand beyond its niche market of high-end electric sports cars. However, Tesla faces competition from established automakers also introducing electric vehicles. Tesla must decide whether to remain a niche manufacturer or try to gain more market share by expanding production. Key issues include maintaining its technological lead, facilitating broader consumer adoption, developing charging infrastructure, and addressing environmental impacts of increased electric vehicle use.
The document provides an overview of the electric vehicle industry structure including its history, products, markets, suppliers, and manufacturing processes. Some key points:
- The electric vehicle industry is relatively young but growing rapidly with over 200,000 EVs now on the road. Competition is increasing as traditional automakers enter the market.
- Products include all-electric vehicles and plug-in hybrids. They are more efficient than gas vehicles but usually have a higher upfront cost due to batteries.
- Markets are developing but will likely segment based on price - affordable EVs under $40k and luxury longer-range models above. Demand is highest in developed areas.
- Suppliers include battery makers
Tesla designs and sells high performance electric vehicles. It aims to accelerate the world's transition to sustainable energy through highly efficient electric vehicles. Tesla brings together automotive and technology to produce beautiful, exciting electric cars with the most efficient production. Its key technology is the 100% electric powertrain. Strategic goals include achieving high Model S production and partnering with other automakers. Competitors include BMW, Daimler, Toyota and GM. Tesla has competitive advantages through its low battery pack costs and proprietary technology. Political and environmental factors like government incentives and climate change awareness support electric vehicles.
Tesla Motors Inc is pitching an investment in the company. Major catalysts for the investment are the upcoming Gigafactory battery production facility and Tesla Model 3 vehicle. The presentation recommends a buy rating for Tesla stock with a 10-year investment horizon and a target price of $545 per share based on discounted cash flow analysis and comparable company valuations. Risks include production and demand challenges.
Tesla Motors is an American electric vehicle and clean energy company founded in 2003 by Martin Eberhard and Marc Tarpenning. It designs and manufactures electric vehicles and sustainable energy products. Elon Musk invested in Tesla in 2004 and is currently the CEO. Tesla has developed several electric car models including the Tesla Roadster, Model S, Model X, Model 3, and Model Y. It also produces energy storage products like Powerwall and solar panels. Tesla aims to transition the world to sustainable energy through innovative electric vehicles and renewable energy products.
Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla's current products include electric cars, battery energy storage from home to grid scale, solar panels and solar roof tiles, as well as other related products and services.
Timeline of Tesla
2003 - Tesla Motors founded by Martin Eberhard and Marc Trepanning in San Carlos, California. They serve as its CEO and CFO, respectively.
2004 - Elon Musk invests $30 million and joins Tesla as the Chairman of its Board of Directors.
2006 - Tesla showcases the prototype for its first car, the all-electric Roadster.
2007 - Eberhard resigns as CEO of Tesla. He is replaced by interim CEO Michael Marks.
2007 - Ze'ev Drori takes over as Tesla's permanent CEO.
2008 - The Roadster enters production. Elon Musk receives the first vehicle produced.
2008 - Ze'ev Drori resigns as Tesla's CEO. He is replaced by Elon Musk who remains CEO to this day.
2008 - Tesla announces its plans for the Model S sedan.
2009 - Eberhard files a lawsuit against Tesla and Musk alleging that he was forced out of the company, and that Musk has taken credit for creating a company that Eberhard and Tarpenning built. He drops the suit later that year.
2009 - Facing financial troubles, Tesla seeks investment from Daimler AG and a loan from the Department of Energy.
2009 - Tesla relocates its headquarters to Palo Alto, where it remains to this day.
2010 - Tesla goes public, raising $226 million in its IPO.
2011 - Tesla showcases the prototype for its Model S, the company's first sedan.
2012 - The Model S sedan goes into full-time production.
2012 - Tesla discontinues production of the Roadster.
2012 - Tesla launches its first Supercharger charging stations with six locations in California.
2013 - Tesla posts its first quarterly profit.
2014 - Tesla announces its Nevada Gigafactory, where the company will manufacture the batteries for all of its products.
2015 - The company enters the solar power market, announcing a line of products to power homes and businesses based on a combination of solar panels and batteries.
2016 - Tesla announces plans for the Model 3 sedan, its first car aimed at a mass market.
2017 - Tesla Motors changes its name to Tesla, Inc. This remains the company's name to this day.
Todays-02.03.2021
Stock data of Tesla
Price-$718.43
Market Cap-$689.59B
Tesla was founded in 2003 and is now a global leader in electric vehicles and sustainable energy. It began by producing the high-end Roadster sports car in 2008 and launched its affordable Model 3 sedan in 2017. Key developments included opening a large factory, introducing autopilot features, expanding the supercharger network, and launching Tesla Energy for power storage solutions. The company aims to accelerate the world's transition to sustainable energy.
Tesla is an American electric vehicle manufacturer founded in 2003 by Martin Eberhard and Marc Tarpenning. It was named after inventor Nikola Tesla. Tesla's mission is to accelerate the world's transition to sustainable energy. It aims to prove that electric vehicles can be better, quicker and more fun than gas vehicles. However, while Tesla makes high-quality popular vehicles like the Model S, it struggles financially, posting consistent losses as it works to expand electric vehicle adoption globally.
One of our presentation during Strategic Management class in KDI School of Public Policy and Management, South Korea. All graphics and information used in this slide belong to the original producer and owner. This slide is for educational purpose only.
This document provides an overview of Tesla Motors including its mission, vision, vehicles, and strategy. It discusses Tesla's goal of making electric vehicles (EVs) a viable alternative to gas-powered cars. The document also analyzes Tesla's position in the automotive industry including competitors and factors impacting growth. It identifies Tesla's technological advantages but also challenges related to costs, production delays, and limited charging infrastructure. Recommendations are made to expand Tesla's network of superchargers and service centers while maintaining responsible technology development and market share gains.
This analysis was done for this specific company interest during my work and there was no other purposes to violate any copyright protections.
In order to get this presentation please send me an email at nishat.env@gmail.com
Final presentation Tesla management project(Swinburne University)Anthony Campana
Tesla is an electric vehicle company founded in 2003 that is leading the industry in technology and design. It has strengths like Elon Musk's leadership and strategic alliances, but also faces weaknesses such as a limited global battery supply and low demand. Tesla aims to be sustainable by building a net-zero energy Gigafactory to double battery production and producing electric vehicles that are better for the environment, though their business model presents challenges and risks changing regulations.
Tesla was founded in 2003 and now has over 14,000 employees. It sells fully electric vehicles worldwide through both online sales and company-owned stores and galleries. Tesla's vehicles can charge at Tesla's network of over 500 Supercharger stations, providing up to 270km of range in 30 minutes. Tesla's vehicles include Models S, X, and Roadster, with prices ranging from $70,000 to $100,000. Tesla directly delivers its vehicles to customers and provides service through its service centers and mobile technicians.
The document provides a presentation on Tesla Motors that includes:
1) An overview and history of Tesla Motors and its electric vehicles.
2) A situation analysis of Tesla's declining sales and share price.
3) An industry analysis identifying challenges around adoption rates, regulations and competition.
4) Two problems are analyzed around Tesla's low production capacity and corporate leadership structure. Strategic recommendations are made to form a joint venture with Boeing and revise Tesla's corporate structure.
This document introduces Tesla Motors' plans to enter the Indian market. It provides background on Tesla, describing how it was founded in 2003 and launched its first electric vehicle. It then discusses Tesla's partnerships with other automakers and current $25 billion net worth. The document performs a PESTLE analysis of India's political, economic, social and technological environment. It also analyzes Tesla's resources and capabilities, applying Porter's Five Forces and VRIO frameworks. In conclusion, it presents Tesla's opportunity in India but notes challenges around price sensitivity and competition in the growing electric vehicle industry.
The document analyzes Tesla's strategic business plan and charging infrastructure strategy. It argues that Tesla's proprietary charging infrastructure puts its investments at risk if a universal charging standard is adopted. The document recommends that Tesla seek partnerships with large charging station networks to expand its geographic coverage and gain greater market share by moving towards a standardized charging system. This would fulfill Tesla's mission to accelerate electric vehicle adoption.
Tesla is an electric vehicle and clean energy company led by CEO Elon Musk. The document discusses Tesla's product line of electric vehicles and home/commercial products, target customers such as business people and environmentalists, and business model of direct sales and Supercharger stations. It provides a brief history of Tesla and biographies of its C-suite executives. Competition in the electric vehicle market is noted along with Tesla's Model 3 being a top seller. The document predicts Tesla's continued success due to company expansion, leadership in technology, and Musk's leadership.
Tesla is attempting to enter the mass market with its Model 3 electric vehicle priced at $35,000. This represents a shift to a new market for Tesla, which has previously only produced high-end luxury electric cars costing $57,000 or more. The success of the Model 3 will depend on Tesla's ability to adapt its production, branding, and customer experience to attract a broader consumer base while still appealing to existing Tesla customers.
This document provides an overview of Tesla's current market situation and brand strategy. It discusses Tesla's small but growing market share in the luxury sedan segment, outlines Tesla's three-stage plan to transition to mass market electric vehicles, and identifies Tesla's key challenge of generating more sales of the Model S to fund continued growth and expansion toward its long term goals.
The document provides an overview of the electric vehicle industry structure including its history, products, markets, suppliers, and manufacturing processes. Some key points:
- The electric vehicle industry is relatively young but growing rapidly with over 200,000 EVs now on the road. Competition is increasing as traditional automakers enter the market.
- Products include all-electric vehicles and plug-in hybrids. They are more efficient than gas vehicles but usually have a higher upfront cost due to batteries.
- Markets are developing but will likely segment based on price - affordable EVs under $40k and luxury longer-range models above. Demand is highest in developed areas.
- Suppliers include battery makers
Tesla designs and sells high performance electric vehicles. It aims to accelerate the world's transition to sustainable energy through highly efficient electric vehicles. Tesla brings together automotive and technology to produce beautiful, exciting electric cars with the most efficient production. Its key technology is the 100% electric powertrain. Strategic goals include achieving high Model S production and partnering with other automakers. Competitors include BMW, Daimler, Toyota and GM. Tesla has competitive advantages through its low battery pack costs and proprietary technology. Political and environmental factors like government incentives and climate change awareness support electric vehicles.
Tesla Motors Inc is pitching an investment in the company. Major catalysts for the investment are the upcoming Gigafactory battery production facility and Tesla Model 3 vehicle. The presentation recommends a buy rating for Tesla stock with a 10-year investment horizon and a target price of $545 per share based on discounted cash flow analysis and comparable company valuations. Risks include production and demand challenges.
Tesla Motors is an American electric vehicle and clean energy company founded in 2003 by Martin Eberhard and Marc Tarpenning. It designs and manufactures electric vehicles and sustainable energy products. Elon Musk invested in Tesla in 2004 and is currently the CEO. Tesla has developed several electric car models including the Tesla Roadster, Model S, Model X, Model 3, and Model Y. It also produces energy storage products like Powerwall and solar panels. Tesla aims to transition the world to sustainable energy through innovative electric vehicles and renewable energy products.
Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla's current products include electric cars, battery energy storage from home to grid scale, solar panels and solar roof tiles, as well as other related products and services.
Timeline of Tesla
2003 - Tesla Motors founded by Martin Eberhard and Marc Trepanning in San Carlos, California. They serve as its CEO and CFO, respectively.
2004 - Elon Musk invests $30 million and joins Tesla as the Chairman of its Board of Directors.
2006 - Tesla showcases the prototype for its first car, the all-electric Roadster.
2007 - Eberhard resigns as CEO of Tesla. He is replaced by interim CEO Michael Marks.
2007 - Ze'ev Drori takes over as Tesla's permanent CEO.
2008 - The Roadster enters production. Elon Musk receives the first vehicle produced.
2008 - Ze'ev Drori resigns as Tesla's CEO. He is replaced by Elon Musk who remains CEO to this day.
2008 - Tesla announces its plans for the Model S sedan.
2009 - Eberhard files a lawsuit against Tesla and Musk alleging that he was forced out of the company, and that Musk has taken credit for creating a company that Eberhard and Tarpenning built. He drops the suit later that year.
2009 - Facing financial troubles, Tesla seeks investment from Daimler AG and a loan from the Department of Energy.
2009 - Tesla relocates its headquarters to Palo Alto, where it remains to this day.
2010 - Tesla goes public, raising $226 million in its IPO.
2011 - Tesla showcases the prototype for its Model S, the company's first sedan.
2012 - The Model S sedan goes into full-time production.
2012 - Tesla discontinues production of the Roadster.
2012 - Tesla launches its first Supercharger charging stations with six locations in California.
2013 - Tesla posts its first quarterly profit.
2014 - Tesla announces its Nevada Gigafactory, where the company will manufacture the batteries for all of its products.
2015 - The company enters the solar power market, announcing a line of products to power homes and businesses based on a combination of solar panels and batteries.
2016 - Tesla announces plans for the Model 3 sedan, its first car aimed at a mass market.
2017 - Tesla Motors changes its name to Tesla, Inc. This remains the company's name to this day.
Todays-02.03.2021
Stock data of Tesla
Price-$718.43
Market Cap-$689.59B
Tesla was founded in 2003 and is now a global leader in electric vehicles and sustainable energy. It began by producing the high-end Roadster sports car in 2008 and launched its affordable Model 3 sedan in 2017. Key developments included opening a large factory, introducing autopilot features, expanding the supercharger network, and launching Tesla Energy for power storage solutions. The company aims to accelerate the world's transition to sustainable energy.
Tesla is an American electric vehicle manufacturer founded in 2003 by Martin Eberhard and Marc Tarpenning. It was named after inventor Nikola Tesla. Tesla's mission is to accelerate the world's transition to sustainable energy. It aims to prove that electric vehicles can be better, quicker and more fun than gas vehicles. However, while Tesla makes high-quality popular vehicles like the Model S, it struggles financially, posting consistent losses as it works to expand electric vehicle adoption globally.
One of our presentation during Strategic Management class in KDI School of Public Policy and Management, South Korea. All graphics and information used in this slide belong to the original producer and owner. This slide is for educational purpose only.
This document provides an overview of Tesla Motors including its mission, vision, vehicles, and strategy. It discusses Tesla's goal of making electric vehicles (EVs) a viable alternative to gas-powered cars. The document also analyzes Tesla's position in the automotive industry including competitors and factors impacting growth. It identifies Tesla's technological advantages but also challenges related to costs, production delays, and limited charging infrastructure. Recommendations are made to expand Tesla's network of superchargers and service centers while maintaining responsible technology development and market share gains.
This analysis was done for this specific company interest during my work and there was no other purposes to violate any copyright protections.
In order to get this presentation please send me an email at nishat.env@gmail.com
Final presentation Tesla management project(Swinburne University)Anthony Campana
Tesla is an electric vehicle company founded in 2003 that is leading the industry in technology and design. It has strengths like Elon Musk's leadership and strategic alliances, but also faces weaknesses such as a limited global battery supply and low demand. Tesla aims to be sustainable by building a net-zero energy Gigafactory to double battery production and producing electric vehicles that are better for the environment, though their business model presents challenges and risks changing regulations.
Tesla was founded in 2003 and now has over 14,000 employees. It sells fully electric vehicles worldwide through both online sales and company-owned stores and galleries. Tesla's vehicles can charge at Tesla's network of over 500 Supercharger stations, providing up to 270km of range in 30 minutes. Tesla's vehicles include Models S, X, and Roadster, with prices ranging from $70,000 to $100,000. Tesla directly delivers its vehicles to customers and provides service through its service centers and mobile technicians.
The document provides a presentation on Tesla Motors that includes:
1) An overview and history of Tesla Motors and its electric vehicles.
2) A situation analysis of Tesla's declining sales and share price.
3) An industry analysis identifying challenges around adoption rates, regulations and competition.
4) Two problems are analyzed around Tesla's low production capacity and corporate leadership structure. Strategic recommendations are made to form a joint venture with Boeing and revise Tesla's corporate structure.
This document introduces Tesla Motors' plans to enter the Indian market. It provides background on Tesla, describing how it was founded in 2003 and launched its first electric vehicle. It then discusses Tesla's partnerships with other automakers and current $25 billion net worth. The document performs a PESTLE analysis of India's political, economic, social and technological environment. It also analyzes Tesla's resources and capabilities, applying Porter's Five Forces and VRIO frameworks. In conclusion, it presents Tesla's opportunity in India but notes challenges around price sensitivity and competition in the growing electric vehicle industry.
The document analyzes Tesla's strategic business plan and charging infrastructure strategy. It argues that Tesla's proprietary charging infrastructure puts its investments at risk if a universal charging standard is adopted. The document recommends that Tesla seek partnerships with large charging station networks to expand its geographic coverage and gain greater market share by moving towards a standardized charging system. This would fulfill Tesla's mission to accelerate electric vehicle adoption.
Tesla is an electric vehicle and clean energy company led by CEO Elon Musk. The document discusses Tesla's product line of electric vehicles and home/commercial products, target customers such as business people and environmentalists, and business model of direct sales and Supercharger stations. It provides a brief history of Tesla and biographies of its C-suite executives. Competition in the electric vehicle market is noted along with Tesla's Model 3 being a top seller. The document predicts Tesla's continued success due to company expansion, leadership in technology, and Musk's leadership.
Tesla is attempting to enter the mass market with its Model 3 electric vehicle priced at $35,000. This represents a shift to a new market for Tesla, which has previously only produced high-end luxury electric cars costing $57,000 or more. The success of the Model 3 will depend on Tesla's ability to adapt its production, branding, and customer experience to attract a broader consumer base while still appealing to existing Tesla customers.
This document provides an overview of Tesla's current market situation and brand strategy. It discusses Tesla's small but growing market share in the luxury sedan segment, outlines Tesla's three-stage plan to transition to mass market electric vehicles, and identifies Tesla's key challenge of generating more sales of the Model S to fund continued growth and expansion toward its long term goals.
Tesla faces significant long-term debt of $3 billion which is draining the company's earnings and hindering growth. The document proposes that Tesla address this challenge by creating adapters for their Supercharging stations to allow any electric vehicle to charge, not just Teslas. This would generate an estimated $20 million in additional annual profit from fees charged to non-Tesla vehicles. In addition to reducing debt, this solution would further Tesla's mission of accelerating sustainable energy adoption by increasing electric vehicle accessibility and market size.
Tesla Motors: A Silicon Valley Version of the Automotive Business ModelSubrahmanyam KVJ
Think of the Model S as an app on four wheels,” says the Tesla website. If software is eating the world, then Tesla Motors sure is showing the automotive industry how by adding technology to the business model. In the few years that Tesla Motors has been around, the company has upended the traditional automotive industry model, using the silicon valley approach to development. The Tesla story is one of singular ambition and bold vision, fuelled by technology. The company has blazed a trail through a traditional industry, using digital to ensure it stays a lap ahead of the competition. Read our research note to understand how Tesla Motors is achieving this
Tesla Motors: A Silicon Valley Version of the Automotive Business ModelCapgemini
Tesla Motors is revolutionizing the automotive industry by taking a technology-centric approach. It uses digital technologies throughout the customer experience and vehicle design. Tesla has a direct-to-consumer sales model with company-owned stores and takes orders online. It also gathers data from vehicles to remotely update software and improve the driving experience. Tesla aims to accelerate innovation in electric vehicles by opening its patents and building a Gigafactory to produce batteries at scale.
This document provides an integrated marketing communications proposal for Tesla Motors from Oklahoma State University. It includes a situation analysis of Tesla's strengths, weaknesses, opportunities, and threats. It then outlines Tesla's promotional mix, including their products, pricing, financing options, and distribution. It discusses Tesla's marketing communications strategies such as press conferences, YouTube videos, retail establishments, and celebrity endorsements. It identifies Tesla's target consumer segments as urban and affluent groups interested in technology.
Tesla Motors faces both short-term and long-term challenges to its growth and leadership in the electric vehicle market. In the short-term, safety concerns over its lithium-ion batteries have hurt its stock price following a car fire. Additionally, increased competition from other automakers launching electric cars threatens Tesla's first-mover advantage. Long-term, Tesla must ramp up production quickly to fulfill pre-orders before competitors gain market share. However, Tesla's focus on customer experience through its supercharging network and battery swaps could help maintain its edge if production increases as planned. Significant further investment will still be needed to solidify Tesla as a leader in the emerging electric vehicle industry.
Six sigma yellow beltTyzenia Renee Williams, Tonya wright, Ter.docxwhitneyleman54422
Six sigma yellow belt
Tyzenia Renee Williams, Tonya wright, Terrence willburn, Melissa Hoolulu, John banzali, ben
Ops 571
Professor soltys
March 19, 2018
1
Customers and Their Priorities
CUSTOMERS
Businesspeople
Travelers
Younger generation
PRIORITIES
Affordability
Incentives
Consideration
Many people choose Tesla for various reasons. Business people require the most luxury form of transportation and want to be seen getting out of a beautiful car as they pull up to work or family excursions. Each buyer has a different reason for purchasing the Tesla and each reason has a corresponding priority. Business people may prefer the convenience option that accompanies the car. Tesla’s are full of provisions for satisfying customer needs, like its electrical feature and environmental safeties. The Tesla are made to order by their customers with the options that they choose, certain items differ, but the convenience of service is available. Offering Wi-Fi is a reasonable perk for keeping customers connected with technology. All customers have similar opportunities and customers have several options. Tesla is certainly a competitor that strives to provide the appropriate, and necessary, amenities for their loyal customers. Customers prefer options, ease of travel, and particular amenities to get the most out of this beautiful car. In addition, employee and customer incentive programs are often a consideration for loyal customers. Incentives allow the customer affordability and economical provisions along with particular in Tesla perks. Other considerations, like safety and the green initiative exhibit the pensiveness of the company encourages customers to order their vehicles months ahead of time when they trade it in trade it back to the Tesla company.
2
Business objectives
To sell as many high quality units as possible
Maintain high customer satisfaction
Maintain a credible reputation
Six Sigma is a business improvement program that was designed originally for manufacturing companies However, its efficiency in furthering business objectives has made its way to a wide variety of project management, sales and marketing, and other organizations in need of an increase in quality and efficiency by identifying defects in the system and correcting it (Madhani, 2017). High end car brands such as Tesla have used Six Sigma to ensure quality in its products. Like any business, the objective is to sell as many high quality units as possible while maintaining high customer satisfaction, hence, a very credible reputation in the automotive industry.
Tesla manufacturers use this program to produce high quality cars that meet the high expectations of its clients. Ensuring that what they purchase with the very expensive car is worth every cent, Six Sigma professionals check every detail in the process of creating a masterpiece of a car.
3
Customer needs
Timely production
Detail precision with specifications
Inventory management
From the time a.
The document provides an executive summary and market research for a proposed new entry-level luxury electric vehicle called the Gen3 from Tesla Motors. It summarizes Tesla's current position and target markets, and outlines a strategy and marketing plan to introduce the Gen3 at an affordable price point of around $30,000 to expand Tesla's target market and increase market share in the EV/hybrid sector. Market research found increasing demand for electric vehicles and a growing luxury vehicle market focused on entry-level models priced around $40,000, suggesting an opportunity for Tesla to attract new customers with an affordable electric car.
This document provides a marketing plan for Tesla's Model 3 vehicle. It includes a situation analysis of Tesla as a brand, research on the target market of professional 34-50 year olds, and a proposed $20 million budget and tactics for an integrated 12-month campaign. The campaign aims to increase brand awareness and Model 3 pre-orders through messaging that positions Tesla as a reliable high-performance electric vehicle, not just an electric car, across online, mobile, and social media platforms.
Tesla aims to accelerate sustainable energy through electric vehicles. It was founded in 2003 to produce electric cars better than gasoline cars. Tesla is expanding manufacturing and is led by Elon Musk. By offering the more affordable Model 3, Tesla is testing the Coase Conjecture, which predicts consumers will delay purchases expecting future price reductions. Tesla uses pricing strategies like segmentation and innovation to minimize the conjecture's effects. However, its history of missed targets threatens these strategies and its financial viability amid growing electric vehicle competition.
The document is a case study about Tesla Motors, Inc. It provides the following key details:
1. Tesla Motors was founded in 2003 to develop electric cars for driving enthusiasts and unveiled its first car, the Roadster sports car, in 2006.
2. In addition to the Roadster, Tesla plans to produce the Model S sedan for the mass market, with a target price of $57,400.
3. Tesla's strategic partnerships include supplying electric powertrains to Daimler and Toyota for their electric vehicles.
4. Tesla competes in the alternative fuel vehicle market against electric, plug-in hybrid, and hydrogen vehicles from other automakers.
Tesla is an American electric vehicle company that produces electric cars, battery energy storage, solar panels, and related products. It was founded in 2003 and is led by Elon Musk. Tesla began by producing its high-priced Roadster sports car in 2008 and has since expanded its lineup to include the Model S sedan, Model X SUV, and Model 3 sedan. In 2020, Tesla sold over 500,000 vehicles globally and surpassed 1 million electric vehicles produced total. The document provides details on Tesla's history, products, production facilities, and business strategy to transition from low-volume, high-price vehicles to higher-volume, more affordable electric cars.
Tesla Motors is an American company that designs and manufactures luxury electric vehicles and battery products. Founded in 2003, Tesla's mission is to accelerate the world's transition to sustainable energy. Tesla has produced powerful batteries and self-driving vehicles that are revolutionizing sustainability by increasing affordability and accessibility of electric transportation. However, as an innovator of new technologies, Tesla faces significant challenges overcoming high costs of research and development as well as ensuring regulations adapt to innovations like self-driving vehicles.
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Tesla Motors is an electric vehicle company that produces high-performance electric cars, including the Roadster sports car and upcoming Model S sedan. The company aims to accelerate the world's transition to sustainable energy through innovative vehicle design. Tesla uses strategic partnerships to gain expertise in areas like manufacturing and has partnered with Toyota and Daimler to supply electric powertrains for their vehicles. While focusing on high-end electric cars, Tesla's goal is to achieve growth through additional vehicle offerings and partnerships that can foster widespread adoption of electric transportation.
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Similar to Tesla model 3 forecasting and supply planning (20)
1. Tesla Model 3 Product Launch Forecast and Distribution Center Analysis
Group 4
Joseph Garcia
Abhinay Reddy Gudimetla
Aaron Norval
Satwinder Singh Thind
Prepared on May 2nd, 2016 for Dr. Long
Engineering Management 5614
Introduction
Tesla gained widespread attention in automobile industry combining world range,
safety, performance, cost, style and spaciousness into electric cars. Tesla operates
over 80 stores in USA and gets its main supply from the production unit “Tesla Factory”
in Fremont, California, and it also has a specialized production plant in Lathrop,
California. Their mission statement is to “accelerate the world’s transition to electric
mobility with a full range of increasingly affordable electric cars”. They are successful in
implementing this by releasing wide range of cars into the market and moving into
larger, more competitive markets at lower price points. To continue this, Tesla
announced the release of a new model “Tesla Model 3” on March 31, 2016 and the cars
are scheduled to be delivered by the end of 2017.
Tesla Model 3 is an all-electric four-door compact sedan car which is aimed to deliver
an all-electric range of atlas 215 miles starting at $35,000. Model 3 is a part of Tesla’s
three step strategy starting at higher price and move progressively towards lower price.
It has gained immense popularity with the number of reservations made after the
launch. It made the heads turn with 325,000 reservations which is more than triple the
number of Tesla Model S cars that has come into production in 2012.
Scope
The objective of this project is to evaluate the current demand of the electric vehicles in
the United States in order to forecast and prepare for the demand of the upcoming
Tesla Model 3. The project is divided into 3 parts. First the project will forecast the
demand for the Tesla Model 3 over the next 4 years. The second part will find the most
optimal locations for new distribution centers in the Northeast, Southeast, and Midwest
regions of the United States with the gravity model. The model will account for the
approximated proportional demand of each of Tesla’s dealerships and their geographic
locations. The final third part will develop a method to most efficiently use the truck
fleets and shipping the cars and aftermarket parts from distribution centers to
2. dealerships at optimized cost. Although further data is needed to implement this
technique, the method is a feasible way of minimizing the transportation cost of the new
distribution centers.
Discussion of Methods
In November 2015 Tesla announced the third quarter of 2015 results and it produced a
record 13,091 vehicles, and also revised its target sales for 2015 to between 50,000
and 52,000 vehicles, including both of its models available for retail sales. The company
expects to achieve an average production and deliveries of 1,600 to 1,800 vehicles per
week for Model S and Model X combined during 2016, adding up to 80,000 to 90,000
new Model S and Model X vehicles in 2016. As a result of the high demand for Model 3
and to meet the demand, Tesla Motors announced its decision to advance its 500,000
total unit build plan (combined for Model S, Model X, and Model 3) to 2018, two years
earlier than previously planned.
In 2014, Tesla’s annual delivery record, is checked in at 33,157 units. For the entirety of
2015, Tesla delivered 50,580 cars, an impressive figure that just managed to surpass
the low-range of Tesla’s delivery projection of 50,000 to 55,000 vehicles. Tesla
deliveries year over year increased by 52%, a striking figure given that some analysts
have been quick to proclaim that anyone who already wants a Tesla likely already owns
one but there is a delay associated with this.
Despite all the positives, the problems and challenges are obvious, not least for logistics
and the supply chain. This included plant locations, quality control, quality holds,
supplier issues, premium freight and capacity issues. Tesla has only ever made
100,000 cars in its history and its factories are scaled for considerably lower levels of
production. Tesla’s “gigafactory”, a 5.5m-sq.ft space in Nevada, which will produce
batteries for Tesla’s cars, is set to start production in 2017, but factories producing the
cars will either have to significantly step up, or more will need to be built.
Tesla’s Fremont plant in California is capable of producing 1,000 cars a week and for a
car manufacturer whose only American production plant is in Fremont, California, the
prospect of millions of dollars of parts and components sitting in cargo ships or port
docks were unsettling. Elon Musk stated that “We will need to build a factory in Europe
to serve long-term regional demand as Fremont reaches max capacity.”
Based on the above statistics, Tesla can narrow down to two options to meet the future
demand in an efficient and responsive way. The first option is to set the dealership and
the second option is setting up distribution centers in convenient locations.
3. Under U.S. law, manufacturers can control the retail price of their products under certain
conditions. As long as the manufacturer specifies its conditions up front, the retailer
must either take the deal or pass and not sell the product in question. Manufacturers
understand that forcing retailers to hold the line on price likely means lower sales
volumes, but believe that they gain reputation as a “quality” brand and can earn more
from fewer, higher priced sales than if they allowed retailers more freedom. Such
behavior does not benefit consumers, as this pricing is specifically designed to be anti-
competitive and to maintain higher prices than would otherwise appear in the
marketplace.
The auto dealers’ claim that they will bring price competition but the process is
weakened by the presence of existing competition from other luxury car dealers. Given
that Tesla’s Model S costs from $70,000 to $90,000 depending on options it seems
likely that their customers are well-educated and financially competent. They
understand that other luxury cars are for sale and can easily find out the prices of those
competitors. If Tesla is charging a higher price for their car in its website, customers
choose to buy a different model available from the retailer. The idea that competition
between Tesla dealers would be fiercer than the competition between, say, Tesla,
BMW, and Mercedes dealers is unlikely. Tesla customers are also quite able to sell their
old cars to an auto dealer if they choose.
Similar restraints exist for other auto manufacturers. If you use a car company website
to custom build the exact model you want, it displays a price, but any sale comes
through a selected local dealer. Here the manufacturers have franchise contracts
signed with the dealers, they cannot set up another amount due to market needs. This
situation leads to losses to Tesla when it has to customize the car with more advanced
parts to serve the customer need.
After all, if Tesla could force retailers to sell only at a specific price, then from the
consumer’s point of view including a retailer separated from the manufacturer adds no
advantage. In order to avoid this, Tesla planned to set up its own showroom and this
decision made room for lots of speculations from the retailers.
Meeting the customer demands is a big problem associated with the Tesla stores and
galleries. Most of them are located in commercial locations and are not permitted to
take the orders or display any price related information which would be a trait of
dealership. The sole purpose of the stores is to promote the Tesla cars and take orders
which are usually done online and the orders are directly delivered to the customers.
This shipment originates from California which adds up to the delay in delivering the
cars. If there is a huge number of orders from a single state the dealers do not have the
4. space to accommodate the orders that are shipped.
This problem can be solved by distribution centers which do not have any legal restrains
as stated for the other option. The cars can be stored and sent for delivery based on the
customer demand. This promotes timely delivery and handling huge orders without
disappointing the customers. As there is a good platform for receiving the orders but not
an option to store them in the dealerships, DC’s would be a good option to help storing
and distributing the orders.
Although Tesla has always done things differently, as production is set to significantly
ramp up, the question is whether it will have to become more like a normal Original
Equipment Manufacturer(OEM) in regards to logistics and supply chain, or will it
continue to change the automotive industry in even more ways?
Our work is to design the supply chain which is responsive and efficient in meeting
demands and deliveries. We propose a mechanism to effectively manage the deliveries
by meeting the demands. The plan is to strategically set up distribution centers covering
three different regions Northeast, Southeast and Midwest in the United States using the
gravity model. The idea behind this implementation is to maintain inventory to fulfill the
customer needs and to be more responsive. This enables the shipment to be delivered
from production unit to distribution centers and from the distribution centers to the
showrooms efficiently and with less cost.
Part 1: Demand Forecast
Forecasting the demand of the Tesla model 3 was an interesting challenge for several
reasons, the biggest of which is that there is no easily comparable data to use. The
most sold electric car in the US is currently the Tesla model S which has sold just over
100,000 units worldwide and only 60,000 in the US. The model 3 already has 325,000
preorders, over 3 times as many units as have been sold of any electric car thus far and
more than the total number of electric cars sold yearly in the US. The number of yearly
electric car sales was given a simple regression analysis ignoring the model 3 launch to
predict the size of the market at the time of the launch and onwards through 2020.
These were listed in table 1.
5. Table 1
Year Total Electric Car Sales Forecasted Tesla Model 3 Sales
2017 44,847 191,436
2018 56,272 229,436
2019 68,642 274,979
2020 81,956 329,563
In the end it was decided to find the average growth in sales each year for Tesla and its
competitors and apply this rate of growth to the model 3 starting at the number of US
preorders. Currently about 59% of Tesla’s sales are in the US alone so it was assumed
that the demand in the US in 2017 would be equal to 59% of the current number of
preorders or 191,436 cars. After looking a several different ways to forecast the demand
it was determined that we would find the average growth rate of sales between the
years and apply that same growth rate to the model 3. While looking at yearly sales of
the Tesla Model S and its direct competitors an average growth rate of 20% each year
was found for electric car sales and this rate was applied to the new model 3 starting at
191,436 cars in 2017. The forecasted values are in table 1.
Part 2: New Regional Distribution Centers and the Gravity Model
The locations of the new regional distributions centers will be determined by the
associated demand and location of the Tesla dealerships in each region. This will be
accomplished with the gravity model which relates the cost of shipping the supplied
demand for a distance between a source and a market. An Excel file has been
attached with this document where you can see the full use of the gravity model.
In order to obtain data to be implemented into the gravity model, the following two
assumptions had to be made. The first assumption is that transportation costs are the
same across each region of the United States. This means that the cost of shipping
one unit of demand one mile is the same in each region. For example, the shipping
cost per mile of one car from New York City to Massachusetts would have to be the
same as shipping to Washington DC. This assumption allows us to ignore price
fluctuations in gasoline or toll road expenses that might otherwise complicate the model.
The second assumption is that the demand for Tesla cars in each dealership is
proportional to the number of plug-in electric vehicle (PEV) registrations in 2014 in each
state divided by the number of dealerships in that state. This means that although
actual demand data for each dealership cannot be obtained, it will suffice to assume
that the proportional difference in the number of registered PEV’s betweens two
6. dealerships is the same as the proportional difference in demand. In order to obtain the
number of registered PEV’s belonging to a particular dealership amongst many in one
state, we also assume that the demand is divided equally amongst each dealership of
that state. While this may not be the case in the real world, the lack of dealerships
across each state causes many cities with dealerships to pick up the demand of cities
without dealerships. While the exact extent to which a dealership picks up this
additional demand is unknown, it is reasonable to assume that Tesla placed dealerships
so that they fulfill demand equally. This is evidenced by the fact that Tesla has placed
multiple dealerships in some cities to satisfy higher demand.
Implementation of the gravity model proceeded as follows. State PEV registrations
were obtained from energy.gov, the Office of Energy Efficiency and Renewable Energy,
for the year 2014. Dealership longitudes and latitudes were taken from Google Earth
and were converted to radians. The registrations were divided equally amongst each
state’s dealerships. An arbitrary distribution center at 0 North, 0 West was set for each
region. The distance in miles between each dealership and this distribution center was
calculated using the haversine formula for computing distances between two
longitudinal and latitudinal coordinates. The haversine formula is shown below where
lat1 and lon1 correspond to the dealership location, lat2 and lon1 correspond to the
distribution center location, and r is the approximate radius of the Earth, 3961 miles.
dlat = lat2 - lat1
dlon = lon2 - lon1
a = SIN( dlat / 2 )^2 + COS( lat1 ) * COS( lat2 ) * SIN(dlon / 2 )^2
-c + pi = 2 * ATAN2( SQRT( a ), SQRT( 1 - a ) )
c = ABS( ( -c + pi ) - PI() )
d = r * c
Each distance was multiplied by the respective proportional PEV registrations to obtain
the demand times distance for each dealership. The sum of these represents the total
demand times distance for an entire region. This sum was minimized using the Excel
solver function. The values chosen to change were the arbitrary longitude and latitude
coordinates given for the new distribution center. The result was the optimum longitude
and latitude coordinates for each region shown below.
8. Midwest:
41.8903°N, 85.1952°W
Bronson, MI
These locations represent the most cost effective locations for supplying demand to
each region’s Tesla dealerships. All regions avoided major bodies of water. In the
event that the optimal distribution center for a particular region was in water, a
constraint would have been made in the solver function. This constraint would be
expanded as necessary until the coordinates appeared on land. This was the preferred
alternative to attempting to set specific bounds for an irregularly shaped body of water.
However in the case of the three chosen regions of the United States, neither method
was required. The locations themselves are about what one could expect from PEV
registrations data. The coordinates are near large population centers that either had
multiple dealerships or had significantly more demand than the dealerships of
neighboring states. As will be shown in the third part of the project, although these
locations minimize transportation costs, more analysis is required to minimize the
inventory cost associated with the new distribution centers and their respective
dealerships.
Part 3: Functionality of DCs
Our motive behind analyzing the functionality is to reduce the overall cost of the supply
chain network. The network involves shipping cars from Tesla Factory to distribution
centers and from distribution centers to dealerships. In this paper, we have tried to
optimize the total cost of supply chain operations of shipping from a distribution center
to dealerships. The overall cost of these operations will include the inventory carrying
9. cost of all dealerships, fixed order cost and transportation cost for shipping cars and
after-market parts to dealerships from a distribution center. This goal can be achieved
by formulating the overall cost problem into a mathematical model.
The overall cost of supply chain network starts from calculating total cost for a single
dealership.
A single dealership’s total cost without transportation cost:
Y (𝑄𝑖) =
𝐻𝑖 𝑄𝑖
2
+ 𝐴𝑖
𝐻𝑖 = holding cost of dealership i per unit per unit time
𝑄𝑖 = quantity to be shipped from DC to dealership i.
𝐴𝑖 = Fixed order cost for dealership i.
The first term of equation is inventory carrying cost for a single supplier and second
term is the fixed cost incurred every time a dealership places an order. The individual
costs of dealerships contribute to supply chain network cost.
All distribution centers have a truck fleet consisting of different types of trucks to
transport products. The transportation cost for different types of trucks is different
depending on their capacities. To use the truck fleets more efficiently we decided to
divide the dealerships associated with a distribution center in each region into districts.
There will be a dedicated truck fleet for each district at all distribution centers. The
dealerships in a district will have equal replenishment cycles but the quantities may
differ from each other depending on the demand from a dealership.
The distribution centers are located close to dealerships, therefore, using trucks for
transportation is the best way to be responsive and cost effective. The maximum
number of districts will be equal to the number of dealerships because each dealership
can be a district by itself and the minimum number of districts will be 1 i.e. all
dealerships in one district. Let a district is indexed by j, a variable can be defined for
selecting dealerships in a district, let there are n number of dealerships that are indexed
by i, therefore,
𝑋𝑖𝑗 = {
1, 𝑖𝑓 𝑑𝑒𝑎𝑙𝑒𝑟𝑠ℎ𝑖𝑝 𝑖 𝑖𝑠 𝑖𝑛 𝑑𝑖𝑠𝑡𝑟𝑖𝑐𝑡 𝑗
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
Let there are m types of truck indexed by k and each district has Z number of k type
trucks.
Therefore,
𝑍𝑗
𝑘
is the number of type k trucks in district j
Let type k truck has capacity 𝐶 𝑘 and full truck load transportation cost of 𝑅 𝑘. The
demand from each dealership is indexed by 𝜆 𝑖.
The total cost for transporting products from DC to dealerships can be given as:
Total Cost:
10. Y (𝑄𝑖 , 𝑋𝑖𝑗, 𝑍 𝑘
𝑗
) = ∑
𝐻𝑖 𝑄𝑖 𝑋𝑖𝑗
2
𝑛
𝑗=1, 𝑖=1
+∑ 𝐴𝑖 𝑋𝑖𝑗
𝑛
𝑗=1, 𝑖=1
+∑ 𝑅 𝑘 𝑍 𝑘
𝑗𝑛,𝑚
𝑗=1, 𝑘=1
• First term is the inventory cost
• Second term is the fixed order cost
• Last term is the trucking cost
The total cost equation is our objective function and the goal is to minimize it. The
mathematical model will be:
Minimize - Y (𝑄𝑖, 𝑋𝑖𝑗, 𝑍 𝑘
𝑗
)
Subject to- ∑ 𝑋𝑖𝑗
𝑛
𝑗=1 = 1 (where j = 1, 2, 3……………n)
∑ 𝑄𝑖
𝑛
𝑖=1 𝑋𝑖𝑗 = ∑ 𝜆 𝑖 𝑋𝑖𝑗
𝑛
𝑖=1 (where i = 1, 2, 3……….n)
∑ 𝑄𝑖
𝑛
𝑖=1 𝑋𝑖𝑗 ≤ ∑ 𝐶 𝑘 𝑍 𝑘
𝑗𝑚
𝑘=1 (where i = 1, 2….n, k=1, 2…..m)
𝑍 𝑘
𝑗
Int
𝑋𝑖𝑗 Binary
𝑄𝑖 ≥ 0
This is a Mixed Integer Non-Linear Model where the first constraint in model shows that
a dealership can be in one district only at a time, the second constraint shows that the
quantity shipped to each district cannot be less than its demand and the third constraint
defines that the quantity to be shipped to a district cannot exceed the capacity of the
trucks available. The number of truck in each district will be integers and Xij is binary.
This problem will give us:
which dealership should be in which district
how much quantity to be shipped to each district
how many different types of trucks are required
Minimum cost of the Distribution operations
Example: Let us suppose there are 5 dealerships associated with a distribution center
and each them has different demand, there are 4 types of trucks with different
capacities and transportation costs. We want to find which dealerships should be
included in which district and how many trucks are needed to get the job done at
minimum cost possible.
Dealerships
1 2 3 4 5
HoldingCost 50 45 55 48 60
Fixedordercost 15 20 15 15 15
Demand 100 110 250 180 160
11. Trucks type Capacity of
trucks
Cost of transportation
1 19 $80
2 39 $110
3 47 $400
4 67 $200
Solution: For this problem the deciding variables are𝑄𝑖, 𝑋𝑖𝑗 and 𝑍 𝑘
𝑗
The notation used in formulation can be defined as:
Let dealerships are indexed by i= 1, 2, 3, 4, 5
Let districts are j= 1, 2, 3, 4, 5
Locating dealerships into districts; Let𝑋𝑖𝑗 = {
1, 𝑖𝑓 𝑑𝑒𝑎𝑙𝑒𝑟𝑠ℎ𝑖𝑝 𝑖 𝑖𝑠 𝑖𝑛 𝑑𝑖𝑠𝑡𝑟𝑖𝑐𝑡 𝑗
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
Truck type is indexed by k= 1, 2, 3, 4, with capacity 𝐶 𝑘and cost𝑅 𝑘.
Using the given data, the problem can be formulated as:
Minimize: ∑
𝐻𝑖 𝑄𝑖 𝑋𝑖𝑗
2
5
𝑗=1, 𝑖=1
+∑ 𝐴𝑖 𝑋𝑖𝑗
5
𝑗=1, 𝑖=1
+∑ 𝑅 𝑘 𝑍 𝑘
𝑗5,4
𝑗=1, 𝑘=1
Subject to: ∑ 𝑋𝑖𝑗
5
𝑗=1 = 1
∑ 𝑄𝑖
5
𝑖=1 𝑋𝑖𝑗 = ∑ 𝜆 𝑖 𝑋𝑖𝑗
5
𝑖=1
∑ 𝑄𝑖
5
𝑖=1 𝑋𝑖𝑗 ≤ ∑ 𝐶 𝑘 𝑍 𝑘
𝑗4
𝑘=1
𝑍 𝑘
𝑗
Int
𝑋𝑖𝑗 Binary
𝑄𝑖 ≥ 0
The Excel solver can be used to solve this problem. The values of variables come out to
be:
Q1 = 100, Q2= 110, Q3 = 250, Q4 = 180, Q5 = 160
X11 = 1, X51 = 1
X25 = 1, X35 = 1, X45 = 1
𝑍2
1
= 3, 𝑍4
1
= 3, 𝑍2
5
= 11, 𝑍4
5
= 2
The results for quantity to be shipped to dealerships are satisfying the demand of each
dealership.
The 𝑋𝑖𝑗variable results show that the dealership 1 and 5 are kept in district 1 and
dealerships 2, 3, 4 are kept in district 5.
The district 1 will have 3 type 2 trucks and 3 type 4 trucks.
The district 5 will have 11 type 2 trucks and 2 type 4 trucks.
The distribution done by using these districts and truck fleets will work at minimum
supply chain network cost for satisfying the demand per unit time, which is $23590.
12. Conclusion
In the United States Tesla needs to be able to meet demand of 191,436 model 3’s in
2017, 229,436 in 2018, 274,979 in 2019, and 329,563 in 2020. This is based off the
number of preorders in the United States and an average sales growth rate of
approximately 20% in the country. To help meet this demand, supply dealerships and
service stations, and improve overall responsiveness in the supply chain we
recommend the construction of regional distribution centers in the United States.
Through the use of a gravity model optimal locations have been found for the midwest,
southeast, and northeast areas of the country. Furthermore a method has be
determined to find the optimal operating cost of potential distribution centers. The next
step for Tesla should be to choose several potential locations near each optimal
location. Each potential location’s total cost must be calculated by adding the cost of
land, construction cost, optimal operating cost, and cost of shipping the distribution
center. While looking at potential locations it is important to take the presence of
railways into account for potential savings when shipping from the factory to each
distribution centers. Once the total cost of each potential distribution center has been
found the best available one can be chosen to satisfy demand and minimize cost.
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