Beruflich Dokumente
Kultur Dokumente
Outline
Responding to predictable variability in a supply chain Managing supply Managing demand Implementing solutions to predictable variability in practice
9-2
Managing Supply
Managing capacity
Time flexibility from workforce Use of seasonal workforce Use of subcontracting Use of dual facilities dedicated and flexible Designing product flexibility into production processes
Managing inventory
Using common components across multiple products Building inventory of high demand or predictable demand products
9-4
Inventory/Capacity Trade-off
Leveling capacity forces inventory to build up in anticipation of seasonal variation in demand Carrying low levels of inventory requires capacity to vary with seasonal variation in demand or enough capacity to cover peak demand during season
9-5
Managing Demand
Promotion Pricing Timing of promotion and pricing changes is important
Pricing decisions based only on revenue may result in failure (marketing perspective). Operations have incentives based on cost Pricing and aggregate planning must be done jointly
9-6
9-7
9-9
10 2 5 300 500 4 4 6 30
9-10
Ex: Aggregate Plan for Red Tomatoe and Green Thumb-No Promotion
Aggregate Plan Decision Variables
Ht
Period 0 1 2 3 4 5 6 # Hired 0 0 0 0 0 0 0
Lt
# Laid off 0 15 0 0 0 0 0
Wt
# Workforce 80 65 65 65 65 65 65
Ot
It
St
Stockout 0 0 0 0 267 0 0
Ct
Pt
Cost = $ 422,275, Revenue = $640,000, Profit = $217,725 Average Flow Time= Av. Inv/Av. Sales=895/2667=0.34 months
9-11
Demand Management
Pricing and aggregate planning must be done jointly Factors affecting discount timing
Product margin: Impact of higher margin ($40 instead of $31) Consumption: Changing fraction of increase coming from forward buy (100% increase in consumption instead of 10% increase) Forward buy
9-12
9-14
Ex: Aggregate Plan for Red Tomatoe and Green Thumb- Discount in January
Aggregate Plan Decision Variables
Ht
Period 0 1 2 3 4 5 6 # Hired 0 0 0 0 0 0 0
Lt
# Laid off 0 15 0 0 0 0 0
Wt
# Workforce 80 65 65 65 65 65 65
Ot
It
St
Stockout 0 0 0 0 320 0 0
Ct
Pt
9-16
Ex: Aggregate Plan for Red Tomatoe and Green Thumb- Discount in April
Aggregate Plan Decision Variables
Ht
Period 0 1 2 3 4 5 6 # Hired 0 0 0 0 0 0 0
Lt
# Laid off 0 14 0 0 0 0 0
Wt
# Workforce 80 66 66 66 66 66 66
Ot
It
St
Stockout 0 0 0 0 1,273 387 0
Ct
Pt
9-18
9-19
Impact of Promotion that Results in Market Growth and Market Share Stealing
Ex: Red Tomato Tools It is estimated that discounting from $40 to $39 results in 100% increase in the period demand because of increased consumption and substitution 20% of the the two following months demand is moved forward. Decide on: Offer discount in January vs. April??
9-20
9-21
Peak (April) Discount: 100% Increase in Consumption, Sale Price = $40 ($39)
Month January February March April May June Demand Forecast 1,600 3,000 3,200 8,480 1,760 1,760
9-22
9-23
9-24
Key Results:
Faced with seasonal demand a firm should use a combination pricing (to manage demand) and production and inventory (to manage supply) to improve profitability. The precise use of each lever varies with the situation. SC profits are maximized only when forecasting and planning efforts are coordinated.
9-25
9-26
9-27
9-28