Metal works case study
Metal Works Case study
Project Summary-
Metal-Works is a manufacturer of steel products such as steel safety boxes and cabinets. At present, the company has two existing manufacturing facilities in Delaware and Iowa. The new appointed CEO of Metal-Works Corporation wants to re-configure the network for the company. The present configuration is believed to not be optimum. As an initiative to improve this situation, the CEO has decided to hire a consultant to analyze the current distribution centers. Metal works serve their whole customer base of 120,000, which is supposed to increase steadily in the coming years. Thus, it is necessary to check all the possible alternatives for improvement. Conclusively, the Mexican plant is a better choice, however, it is recommended to increase the planning horizon and reconsider the choices again.
The Major assumptions for the simulation are as follows-
1. The steel cabinet production can be increased by 50% at a cost of $1.5 Million. Once the new equipment is installed the variable production cost will be decreased by $0.05 per steel cabinet. Some plant shutdown time is involved, but can be ignored in the analysis.
2. Production line for the safety box cabinet can be increased by 25% at a cost $ 75 Thousands. Variable cost will be decreased by $ 0.10.
3. It will take a year to open the Mexican facility.
Method of Analysis
Analysis steps-
1. Simulate the base analysis as a reference frame.
2. Try to change the existing capacity of the warehouses.
3. Increase the no. of the existing ware houses and run the optimization process.
4. Extend the setup of steel Cabinet and safety box separately.
5. Check if the above individual cost scenarios are feasible.
6. Consider the lowest cost per scenario as an opportunity for further investment.
7. Extend the production in Iowa in 2010, check if it is feasible, and continue.
8. Check if the above scenario is feasible with each year.
9. Consider the lowest cost per scenario as an
Project Summary-
Metal-Works is a manufacturer of steel products such as steel safety boxes and cabinets. At present, the company has two existing manufacturing facilities in Delaware and Iowa. The new appointed CEO of Metal-Works Corporation wants to re-configure the network for the company. The present configuration is believed to not be optimum. As an initiative to improve this situation, the CEO has decided to hire a consultant to analyze the current distribution centers. Metal works serve their whole customer base of 120,000, which is supposed to increase steadily in the coming years. Thus, it is necessary to check all the possible alternatives for improvement. Conclusively, the Mexican plant is a better choice, however, it is recommended to increase the planning horizon and reconsider the choices again.
The Major assumptions for the simulation are as follows-
1. The steel cabinet production can be increased by 50% at a cost of $1.5 Million. Once the new equipment is installed the variable production cost will be decreased by $0.05 per steel cabinet. Some plant shutdown time is involved, but can be ignored in the analysis.
2. Production line for the safety box cabinet can be increased by 25% at a cost $ 75 Thousands. Variable cost will be decreased by $ 0.10.
3. It will take a year to open the Mexican facility.
Method of Analysis
Analysis steps-
1. Simulate the base analysis as a reference frame.
2. Try to change the existing capacity of the warehouses.
3. Increase the no. of the existing ware houses and run the optimization process.
4. Extend the setup of steel Cabinet and safety box separately.
5. Check if the above individual cost scenarios are feasible.
6. Consider the lowest cost per scenario as an opportunity for further investment.
7. Extend the production in Iowa in 2010, check if it is feasible, and continue.
8. Check if the above scenario is feasible with each year.
9. Consider the lowest cost per scenario as an