Metalworks Case Essay

1572 WordsNov 22, 20127 Pages
| 2012 | | KLU | Metalworks case study | Students: | Introduction : Metalwork is a company supplying cabinets and safety boxes. At the moment it has two plants and two warehouses which are “Des Moines” and “Dover”. Metalwork also uses an external supplier in case they can’t meet the demand. However in the case Metalwork has to buy products from supplier it doesn’t make any profit since the selling price $75 for the cabinet and $107 equals the buying price. Regarding this situation Metalwork has decided to improve its logistic efficiency by either increasing its capacity in “Des Moines” or investing in Juarez, Mexico by building up a new factory. Our job in this condition is to analyze the best option, to optimize the…show more content…
The manufacturing cost is really high: 749 750 420 $ compared to 138 145 001$ in the first scenario. Regarding the new constraint we really realize that Metalwork needs to invest in new plant and in new warehouses. Baseline scenario with direct shipment and with distance constrains for warehouse to customer and supplier to customer. The scenario is not feasible because the warehouse capacity is limited and the distance from supplier to some customers is greater than the distance restriction. We decided to apply this restriction because we fought it was necessary to apply the distance constraints to the supplier also. Indeed the service level must be equal for every product to every customer. Indeed the customer doesn’t need to know and don’t care if the product is from the supplier plant or Metalwork plant. Increased demand scenario in Des Moines We increase capacity of Des Moines. The production capacity of the safety boxes increases by 25% and cabinets by 50%. We set the additional $1 250 000 operation costs. And we decrease the cost for each unit produced in Des Moines by 50 cents. We apply these directives into our data base for every time period. We also add the possibility to go from 2 warehouses to 4 warehouses for the 4 time period. Two of the warehouses are fixed. One in Des Moines and one in Dover. So in this

More about Metalworks Case Essay

Open Document