The problem we are presented with is to optimize the amount of boxes of shoes to be transported from 2 warehouses to 10 different Macy’s stores such that the cost is minimized. The main consideration of this problem are the price differences associated with each combination of transports. This means that each combination of warehouse to mall has a different shipping cost. Additionally, there are three different shipping costs based on the quantity of boxes being shipped. Combining these factors results in 60 decision variables which makes it necessary to use linear programming in order to minimize the cost. The chosen decision variables are the amount of boxes of shoes per specific trip and quantity. To describe this in a single variable, …show more content…
Our decision variables consist of the amount of boxes of shoes per specific trip and are multiplied by their respective costs. We chose to denote these variables with one single variable, X, accompanied with subscripts that stand for the specific warehouses and malls, as well as the piecewise function values that denote different price points dependent on quantity of shoe-boxes delivered. Our decision variables follow the format of: XW2M4C stands for “X” number of boxes from warehouse 2 to Macy’s store #4 with price pertaining to quantity range C. For variables with an “A” in the subscript, the price factor is 1 (per table 2) . For variables with “B” and “C” in the subscript, the price factors in table 2 are taken into account according to the quantities found in table …show more content…
Each price factor is given in table 2 and are based on the quantity ranges of shoes being shipped (table 3). The demand constraint consists of the sum of possible combination of shipments to each store. This results in 10 different demand constraints since there are 10 different stores. The supply constraints consist of the sum of each possible combination of shipments to every mall from each warehouse, yielding 2 supply constraints. The bounds on the demand and supply constraints are given in table 1. The non negativity constraint ensures that the decision variables remain positive since there cannot be a negative quantity of
If a company decides to help differentiate its branded footwear by offering buyers 500 models/styles to choose from, then company managers should evaluate the merits of trying to reduce the $14 million annual costs for production run setup costs associated with producing 500 models/styles at each plant by
A business model is an important and integral part of the business a strategy of any firm whether big or small. The way a business model is developed determines and indicates the values, ethics and principles on the lines of which the business at large will be operating. It also indicates how the business is going to function and covers various internal and external dimensions of a business and the organization as a whole.
Unlike Starbucks, Macy’s is not doing very well, as evidenced by the fact they announced last month the impeding closure of 68 stores (Peterson, 2017). The company has been struggling for a few years with the growth of the internet and online businesses such as Amazon making their brick and mortar stores impractical in modern times. While the number of stores may not seem like as much of a problem as it is, as other companies have had to close down more in recent years or go out of business in general, this is a symptom of larger problems in both the company and the industry.
Kohl’s opened their first department store in 1962 Brookfield, Wisconsin a spinoff of the Kohl’s Grocery chain which was founded in Milwaukee, Wisconsin in the late 1920s. Kohl’s has grown to over 730 stores in 41 states. (Reference for Business, 2005)
The case involves the decision to locate a new store at one of two candidate sites. The decision will be based on estimates of sales potential, and for this purpose, you will need to develop a multiple regression model to predict sales. Specific case questions are given in the textbook, and the necessary data is in the file named pamsue.xls.
Patricia is researching venues for a restaurant business. She is evaluating three major attributes that she considers important in her choice: taste, location, and price. The value she places on each attribute, however, differs according to what type of restaurant she is going to start. If she opens a restaurant in a suburban area of Los Angeles, then taste is the most important attribute, three times as important as location, and two times as important as price. If she opens a restaurant in the Los Angeles metropolitan area, then location becomes three times as important as taste and two times as important as price. She is considering two venues, respectively, a steak restaurant and a pizza restaurant, both of which are priced the same.
Hollister Co. was founded in 2000 and is based in Los Angeles, California. The company operates as a secondary business for Abercrombie & Fitch Management. The company provides clothing and accessories for men and women. Hollister’s main target consumers are teenagers. Hollister retails its products through a chain of stores in the United States, Canada, and the United Kingdom. They also sell their products online. The marketing strategies that Hollister use to promote their products are by using a logo, a slogan, and informing what their products are pertaining too. Two of the marketing strategies are very effective in attracting consumers while one of the marketing strategies needs more research to be done. Because of Hollister’s well known slogan, attractive logo, and the way they use celebrities to represent their product, this makes them unique compared to other clothing businesses.
Critically analyze the organization from the systems approach. You should consider the inputs, transformation and output elements of the operation and consider how the system creates value.
it is important to identify key strengths of the company over upcoming threats and weak points. Macy’s differentiate itself from competition with upscale “Celebrity” brand exclusivity, merchandise based on local preferences, and unique store design atmosphere. Based on analysis performed the company weighted strategy is to move towards the online and technology advances with maintaining Macy’s upscale storefront culture, integrating new product offerings with revising promotions to satisfy its target market and expanding operations to a new markets with present demand. From opportunities analysis strategy can be divided in three fragments
Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isidore, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. This performance is primarily due to the core functions and operations of the business. Planning, organizing, leading, and controlling. Macy's excels at these forms of management, which has allowed the company to perform at a higher level relative to its peers in the industry.
o This decision model assumes that variable costs, such as materials and labor, are linear over the relevant range; that is, there are no volume discounts on material, and that addition of more labor does not incur further costs.
some critical factors related to the consumers & their buying patterns are the target market size & growth, sale cyclicity, & seasonality.
Ammons et al. (1997) developed a mixed integer linear programming (MILP) model for the reverse supply chain design of used carpets. The model considers a two-level network that includes collection of used carpets from carpet dealerships, as well as separation of nylon and other reusable materials while landfilling the remainder. Although the delivery sites for recovered materials are assumed to be known, the optimal number and location of both collection sites and recycling plants for alternative configurations are to be determined. In addition, the amount of carpets collected from each site is to be determined. A sensitivity analysis is performed in order to evaluate the impact of several
The Aim of this research is to develop a model which includes liquidation of Inventory based on regional requirements along with reduction of Inventory costs to define an optimum level between variant complexity and material cost with focus on optimal inventory without affecting the Flexibility of Supplies.
Excel Leather Shoes Company (ELS) is my company and it manufactures and sells leather shoes. The leather shoes are differentiated in the kind of shapes, and outlook and this enables to meet the demands and preferences of different customers. The variable cost per pair of the leather shoe is $30. These varieties that I sell have elegant shape and are highly recommendable outfit as an official wear. SLE has fixed production costs of $4000 per month, so my cost function is C(x) = 4000 + 30x. On the instances where there is limited availability of funds, I would still be able to calculate the highest number of units that the business would be able to produce using the available resources. In our case, the ELS business does not have a limited budget. In case there was a budget limit, for instance, we assume that limit budget is $160,000, the highest number of units that the company would be able to produce on a monthly basis would be limited to 5,200 units. The highest number of units that company would be able to produce is computed as follows, $16000 = $4000+30x, in this case x represents quantity = 5200 units.