Metalworks case study | Students: |
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…
So as we see on the map bellow, all the customers are supplied and the 4 warehouses are dispatched on every side of the United States. Plus there are only a few customers supplied by two warehouses, because of warehouse capacity. So clearly the result is conclusive. The demand is met the costs go down and the profit rises.
Mexican Plant scenario
In this scenario the objective of Metalwork is to improve the network of its plants and also to relocate its investment into a low labor cost country. The opening cost of this plant opening is $5 000 000.
In order to make this scenario work we had to reset the data for the 4 time period, that is to say cancel the downsize in costs and production capacity in Des Moines.
We also forbid the direct shipment from supplier to customer if needed. And used the railway West transportation for Railway warehouses West to supply our products to the warehouses. But we still have the same problem as in the previous scenario that is to say that