Veestel Case Summary
| Vestel Case | Supply chain Management | | | |
|
Analyzing Smaller Scale Vestel System
Distribution plan for Vestel
Assumptions for calculations:
1. The truck can be filled to 100% of the capacity. The shape of the items to be shipped is not a constraint.
2. Handling costs such as unloading the shipment is not considered.
In order to find the distribution plan for Vestel that yields to the lowest transportation cost we have analyzed different scenarios taking into account the following: * The number of units that have to be shipped to each of the cities * The volume of each type of product: Televisions 1vol./unit, Refrigerator 3vol./unit. * The capacity of the different trucks available large truck: …show more content…
Analysis of different scenarios yields to the conclusion that the lowest cost is achieved by: * Optimizing truck distance * Achieving the lowest cost per unit of volume shipped. That implies choosing the type of truck and considering the capacity utilized in each shipment. For example; the large truck has a capacity of 18vol. and a cost of $10, so the cost per vol. shipped is $0.55 per mile (10/18). However, if the average utilization of the truck is 55%, on average, just 10 vol. are shipped, and the cost per vol. shipped will rise to $1 per mile (10/10).
There are several factors that could change the optimal solution - * We may not be able to achieve 100% utilization due to the shape of the products * If we could have some additional utilization when the trucks are heading back, there could be more cost saving for certain routes. But this will require a more complex transportation planning. * If we can negotiate better rate for a particular truck, we could use only one type of truck. This will make the planning simpler. There will also be cost saving (such as maintenance) due to the usage of a single truck
|
Analyzing Smaller Scale Vestel System
Distribution plan for Vestel
Assumptions for calculations:
1. The truck can be filled to 100% of the capacity. The shape of the items to be shipped is not a constraint.
2. Handling costs such as unloading the shipment is not considered.
In order to find the distribution plan for Vestel that yields to the lowest transportation cost we have analyzed different scenarios taking into account the following: * The number of units that have to be shipped to each of the cities * The volume of each type of product: Televisions 1vol./unit, Refrigerator 3vol./unit. * The capacity of the different trucks available large truck: …show more content…
Analysis of different scenarios yields to the conclusion that the lowest cost is achieved by: * Optimizing truck distance * Achieving the lowest cost per unit of volume shipped. That implies choosing the type of truck and considering the capacity utilized in each shipment. For example; the large truck has a capacity of 18vol. and a cost of $10, so the cost per vol. shipped is $0.55 per mile (10/18). However, if the average utilization of the truck is 55%, on average, just 10 vol. are shipped, and the cost per vol. shipped will rise to $1 per mile (10/10).
There are several factors that could change the optimal solution - * We may not be able to achieve 100% utilization due to the shape of the products * If we could have some additional utilization when the trucks are heading back, there could be more cost saving for certain routes. But this will require a more complex transportation planning. * If we can negotiate better rate for a particular truck, we could use only one type of truck. This will make the planning simpler. There will also be cost saving (such as maintenance) due to the usage of a single truck