case
EM505 METU 2013
Capacity Building for a Supply Chain in Process Industry
Due January 13, 2014
The honor system is an important part of education. This case assignment is to be done in teams of two students and working in collaboration with other teams is not allowed. Students can discuss about the problem with their partners only.
An industrial company is considering the enlargement of its production capacity due to increases in demand in the last decade. The company has three main plants that are dedicated to produce two types of an industrial product, P1 and P2. Istanbul, Ankara and Mersin host these plants. Plant capacities are given in Table 1.
Table 1. Main plant capacities
Location
Ankara
Istanbul
Mersin
Annual capacity*
45,000
60,000
45,000
* The capacity requirements of P1 and P2 are the same, i.e. a single unit of both products requires one unit of capacity in the main plant.
Both products are produced from a semi-processed product and both require 0.136 units of semiprocessed products. The semi-processed products are manufactured in the two minor plants located in Afyon and Gaziantep. The raw material needed for manufacturing of semi-processed products is supplied from six suppliers. Each unit of semi-processed products requires 1 unit of raw material. Tables 2-3 show the related information for minor plants and raw material suppliers.
Table 2. Minor plant capacities
Location
Afyon
Gaziantep
Annual capacity
17,000
14,200
Table 3. Supplier raw material capacities
Supplier
Denizli
Diyarbakir
Erzurum
Eskisehir
Manisa
Van
Annual amount
15,800
2,750
3,000
2,400
11,750
12,800
The finished products are sold to 14 small sized manufacturing firms (customers) distributed all over the country. Products are shipped from plants directly to these customers under the company’s single sourcing strategy. Single sourcing refers to satisfying all product demand at a
location from one main plant. Detailed
Capacity Building for a Supply Chain in Process Industry
Due January 13, 2014
The honor system is an important part of education. This case assignment is to be done in teams of two students and working in collaboration with other teams is not allowed. Students can discuss about the problem with their partners only.
An industrial company is considering the enlargement of its production capacity due to increases in demand in the last decade. The company has three main plants that are dedicated to produce two types of an industrial product, P1 and P2. Istanbul, Ankara and Mersin host these plants. Plant capacities are given in Table 1.
Table 1. Main plant capacities
Location
Ankara
Istanbul
Mersin
Annual capacity*
45,000
60,000
45,000
* The capacity requirements of P1 and P2 are the same, i.e. a single unit of both products requires one unit of capacity in the main plant.
Both products are produced from a semi-processed product and both require 0.136 units of semiprocessed products. The semi-processed products are manufactured in the two minor plants located in Afyon and Gaziantep. The raw material needed for manufacturing of semi-processed products is supplied from six suppliers. Each unit of semi-processed products requires 1 unit of raw material. Tables 2-3 show the related information for minor plants and raw material suppliers.
Table 2. Minor plant capacities
Location
Afyon
Gaziantep
Annual capacity
17,000
14,200
Table 3. Supplier raw material capacities
Supplier
Denizli
Diyarbakir
Erzurum
Eskisehir
Manisa
Van
Annual amount
15,800
2,750
3,000
2,400
11,750
12,800
The finished products are sold to 14 small sized manufacturing firms (customers) distributed all over the country. Products are shipped from plants directly to these customers under the company’s single sourcing strategy. Single sourcing refers to satisfying all product demand at a
location from one main plant. Detailed