Question D:
In this question, we are asked to simulate a dual sourcing strategy to be able to compare it to a single sourcing strategy. In other words, the question is asking to look for the most beneficial supply strategy that the manufacturer could use to produce the highest profit. The strategy choices are: supplier-1, or supplier-2, or both suppliers. In this case, to simulate a dual strategy our yield factor is [1.2, 0.77]. It means the company will order 120% of quantity ordered from supplier-1 and will order 77% of customer demand from supplier-2. Since the initial problem states supplier-1 only satisfies 70% of our order, the increase to 120% will guarantee supplier-1 is providing 84% of our order. On the other hand, supplier-2 will deliver all 77% orders that we request and they are left with a minimal amount to supply. While some formulas remain the same, here are some unique formulas we are …show more content…
This will tell us how much our customers will buy from us in a season for a period of five thousand years. Then we run a randomized calculation on a number of supplies we receive from supplier-1 to meet the customer's demand, which is called S1 Fulfillment. Once S1 Fulfillment is noted, the amount of supplies that supplier-2 can provide, “S2 Fulfillment”, can be simulated via the equation listed before. Disposal cost is calculated as if supplier-1 provides more than the demand, we pay a fee for each extra supply from supplier-1. Sales are how much revenue the manufacturer generates by selling the supplies. Cost from each supplier is calculated as number of supplies is multiplied by each price. Supplier-1 charges the manufacturer $40 per unit while supplier-2 charges the manufacturer $80 per unit. Finally, profit is calculated as costs from supplier-1, supplier-2, and disposal activities, are subtracted from revenue. When the whole row is calculated, we drag it down to N=5000 (refer to Fig.5 in Appendix
In this question, we are asked to simulate a dual sourcing strategy to be able to compare it to a single sourcing strategy. In other words, the question is asking to look for the most beneficial supply strategy that the manufacturer could use to produce the highest profit. The strategy choices are: supplier-1, or supplier-2, or both suppliers. In this case, to simulate a dual strategy our yield factor is [1.2, 0.77]. It means the company will order 120% of quantity ordered from supplier-1 and will order 77% of customer demand from supplier-2. Since the initial problem states supplier-1 only satisfies 70% of our order, the increase to 120% will guarantee supplier-1 is providing 84% of our order. On the other hand, supplier-2 will deliver all 77% orders that we request and they are left with a minimal amount to supply. While some formulas remain the same, here are some unique formulas we are …show more content…
This will tell us how much our customers will buy from us in a season for a period of five thousand years. Then we run a randomized calculation on a number of supplies we receive from supplier-1 to meet the customer's demand, which is called S1 Fulfillment. Once S1 Fulfillment is noted, the amount of supplies that supplier-2 can provide, “S2 Fulfillment”, can be simulated via the equation listed before. Disposal cost is calculated as if supplier-1 provides more than the demand, we pay a fee for each extra supply from supplier-1. Sales are how much revenue the manufacturer generates by selling the supplies. Cost from each supplier is calculated as number of supplies is multiplied by each price. Supplier-1 charges the manufacturer $40 per unit while supplier-2 charges the manufacturer $80 per unit. Finally, profit is calculated as costs from supplier-1, supplier-2, and disposal activities, are subtracted from revenue. When the whole row is calculated, we drag it down to N=5000 (refer to Fig.5 in Appendix