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Supply and Demand Decision

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Supply and Demand Decision
Several companies use warehouse inventory to stock company stores to serve the buyers. Shipping fees are a significant cost to the company. Ample Computers has warehouses in Chicago, New York, and San Diego. The firm owns company-owned, retail stores in Houston, Indianapolis, and Miami. Each warehouse has 3,000 computers in inventory. The demand for computers at the store in Miami is 2,500 or more. Indianapolis needs at least 2,500 computers, and a minimum of 4,000 computers has been requested at the Houston store.

Below are the shipping costs for each computer shipped from each warehouse to each company-owned, retail store.

Warehouse Houston Store Indianapolis Store Miami Store
Chicago $1.20 $0.60 $0.50
New York $2.00 $1.10 $0.90
San Diego $3.00 $2.60 $2.80

To minimize the shipping costs, how many computers should be shipped from each warehouse to each company-owned, retail store?

What is the correct method to set up this problem in excel solver?

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Solution Summary

A Supply and Demand Decision is studied.

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Supply Chain Management Case Study

Barilla Spa (A) Case Questions

1. Diagnose the underlying causes of the difficulties that the JITD program was created to solve. What are the benefits and drawbacks of this program?

2. What conflicts or barriers internal to Barilla doe the JITD program create? What causes these conflicts? As Giorgio Maggiali, how would you deal with these?

3. Why are Barilla's customers so resistant to the JITD idea? How might Maggiali be more successful in persuading customer to at least try the JITD program?

4. In the environment in which Barilla operated in 1990, do you believe JITD would be feasible? Effective? If so, which customer would you target next? How would you convince them that the JITD program was worth trying? If not, what alternatives would you suggest to combat some of the difficulties that Barilla's operating system faces?

In general, if one party is to make the inventory replenishment decisions for the system, who should it be? Why is it Barilla who is making the decision? Why doesn't Barilla pass information to the distributor and let the distributor make the "system-optimal" decision?

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