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Solution for Supply Chain Network Design: Applying Optimization and Analytics to the Global Supply Chain 1st Edition Chapter 6, Problem 1

by Michael Watson Sara Lewis Peter Cacioppi Jay Jayaraman
106 Solutions 14 Chapters 18731 Studied ISBN: 9780133017373 Supply Chain Management 5 (1)

Chapter 6, Problem 1 : 1. UPS Model—Mini Case Study. ...

1. UPS Model—Mini Case Study.

We will work with the same case mentioned previously in this chapter, except average shipping size per package will change to five pounds. You can find this case and further instructions on the book web site. The file is called UPS Model 5 lb Avg.zip. Open the model and change the average shipping size to five pounds.

a. Run the baseline model with just the Louisville warehouse and keep the current demand. What is the cost of the baseline?

b. Run additional scenarios for the best two, three, and four warehouses. Which warehouses did it pick, and what is the cost difference between the scenarios?

Step-By-Step Solution

1. For Part a, see the solution “1-1 DC in Louisville.” The total cost is $9.9 million.

For Part b, it is not clear whether Louisville is fixed or not; we ran both ways. The “Best 1, Best 2, Best 3, and Best 4” scenarios do not have Louisville as fixed.

Here are the warehouses picked with their total volume. The first four are with Louisville; the next four do not have Louisville fixed:

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