What Is Appendix B-2?
Question B
For Question B, there was a need to simulate the possibility of supplier-1 not meeting the demand of the chocolate manufacturing company as it had an unexpected disease run across its fields. In order to simulate this hypothetical situation, we assume the company is diversified and has a backup supplier they could order from. The order amount supplier-1 could fulfill was set at 17 no matter what demand was because of the tree disease and the simulation was run for 5000 holiday seasons once again. A screenshot of part B can be found in Appendix B-1. Then supplier-2 fulfilled the rest of the demand by using the equation =demand-S1 fulfillment. The cost of each was calculated separated and added at the end for a total cost with disposal …show more content…
However, this is not as horrible as having no secondary supplier to rush order from. Rushing supplier-2 the meet the remainder of the demand will come at a price. The expected rush probability is at 22%, which is high since it is a holiday season in this scenario. A screenshot of the output for this problem can be found in Appendix B-2. With the expected percentage of rushing being 22.2% and total quantity needed from supplier-2 being five units on average for $100, this can affect the long term successfulness of the chocolate manufacturing company. Especially, since the rushing of supplier two during the holiday season can result in no chocolate being in stores until supplier-2 ships their product. Satisfying customers during a busy holiday season could potentially lead to them coming back after the season, meaning more profits through customer loyalty. Not having enough demand or waiting for demand because of a reliability issue is not an option at any point for that …show more content…
Question B can be considered a mixed strategy because it utilizes both suppliers. The total cost for the chocolate company from obtaining supplies this way was actually lower than if using just supplier-2 and supplier- for cocoa beans. The reason is that despite the higher rush order cost, it was only used for a small amount of demand that needed to be met. Whereas using one supplier requires all units to be bought at the same price ($40 or $80) and disposal costs must be added to meet demand with just supplier -1. Therefore, single strategies can add up to be a larger cost for the chocolate manufacturing company and shows how mixing suppliers can prove to be
For Question B, there was a need to simulate the possibility of supplier-1 not meeting the demand of the chocolate manufacturing company as it had an unexpected disease run across its fields. In order to simulate this hypothetical situation, we assume the company is diversified and has a backup supplier they could order from. The order amount supplier-1 could fulfill was set at 17 no matter what demand was because of the tree disease and the simulation was run for 5000 holiday seasons once again. A screenshot of part B can be found in Appendix B-1. Then supplier-2 fulfilled the rest of the demand by using the equation =demand-S1 fulfillment. The cost of each was calculated separated and added at the end for a total cost with disposal …show more content…
However, this is not as horrible as having no secondary supplier to rush order from. Rushing supplier-2 the meet the remainder of the demand will come at a price. The expected rush probability is at 22%, which is high since it is a holiday season in this scenario. A screenshot of the output for this problem can be found in Appendix B-2. With the expected percentage of rushing being 22.2% and total quantity needed from supplier-2 being five units on average for $100, this can affect the long term successfulness of the chocolate manufacturing company. Especially, since the rushing of supplier two during the holiday season can result in no chocolate being in stores until supplier-2 ships their product. Satisfying customers during a busy holiday season could potentially lead to them coming back after the season, meaning more profits through customer loyalty. Not having enough demand or waiting for demand because of a reliability issue is not an option at any point for that …show more content…
Question B can be considered a mixed strategy because it utilizes both suppliers. The total cost for the chocolate company from obtaining supplies this way was actually lower than if using just supplier-2 and supplier- for cocoa beans. The reason is that despite the higher rush order cost, it was only used for a small amount of demand that needed to be met. Whereas using one supplier requires all units to be bought at the same price ($40 or $80) and disposal costs must be added to meet demand with just supplier -1. Therefore, single strategies can add up to be a larger cost for the chocolate manufacturing company and shows how mixing suppliers can prove to be