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Project #2 Ford Canadian Service Parts Distribution

Project #2 Ford Canadian Service Parts Distribution. John H. Vande Vate Spring, 2001. Questions: How many regional DCs? Where to locate them? Whom should they serve?. Assignment. Report to Manager Exec. Summary < 1-page Full details < 5-pages

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Project #2 Ford Canadian Service Parts Distribution

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  1. Project #2Ford Canadian Service Parts Distribution John H. Vande Vate Spring, 2001 1

  2. Questions: How many regional DCs? Where to locate them? Whom should they serve? Assignment 2

  3. Report to Manager Exec. Summary < 1-page Full details < 5-pages Technical Appendix that clearly explains methods and models < 3 pages Assume Manager is Director of Service Parts Distribution, Canada Deliverables 3

  4. Transportation Costs Inventory Costs Service Capital Costs Issues 4

  5. Inbound transportation cost Truckload carrier $2/mile 30,000 lbs capacity All shipments from National Replenishment Center in Detroit Outbound transportation cost Delivery service $6/mile + $0.10/lb Weekly delivery + expedite (ignore) Transportation Cost 5

  6. Assume suppliers are paid when product leaves National Replenishment Center in Detroit Truckload shipments: 50 miles/hr. Delivery shipments: 40 miles/hr. Assume Dealer pays COD Inventory Cost 6

  7. Service • Ideally want next day service to dealerships 7

  8. A new distribution center costs on the order of $20 million dollars to build and $1 million per year to operate. This includes only the “fixed” portion of the operating expenses, e.g., management, insurance, utilities, security, … Capital Costs 8

  9. FordCanada.xls “Map” depicting dealer locations Dealer Info Product Info Data Available 9

  10. Current DCs 10

  11. Demands are Annual, deliveries are weekly A good approximation of Distance 69 * ArcCos(Sin(latA * pi / 180) * Sin(latB * pi / 180) + Cos(latA * pi / 180) * Cos(latB * pi / 180) * Cos((lonA - lonB) * pi / 180)) For shorter distances 49*sqrt((latA - latB)2 + (lonA - lonB)2) is reasonably close Assumptions 11

  12. March 20th April 3 for Video students Due Date 12

  13. If you can’t program (say visual basic in Excel) AMPL has functionality like while …, for..., repeat … ... Hint 13

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