Itm 436 Mod4 Slp

Trident University

Module 4 - SLP

ITM436: Operations Mgmt and Operations Sys.

Professor:

April 16, 2013

Happy customers, low costs and low inventory…the main goal of supply chain management. Sounds like an easy task or does it? While in the simulation, it was in week 17 of the operation for Samuels Root Beer. The task I placed emphasis on was to remove the backlog and keep the inventory and cost low. I was able to learn a great deal about supply chain management at a higher level.

Simulation

While in the simulation, I was to start the simulation with week 17 of the operation. During this week, the backlog was at 220,000 orders. The cost per week was increasing due to the orders to the wholesaler were not meeting the demand of the new orders from customers. I took three approaches in the simulation on three different occasions.

First approach

The first approach was to understand the simulation. I understood the concept of what needed done, but did not grasp the attack for the resolution. During this approach, I was ordering to understand the simulation. As Prof Lee noted, “the Bullwhip Effect” was in full effect. After placing the order for a couple of weeks, the backlog was increase as well as the weekly and cumulative costs. This was not the desired outcome. Finally, after an understanding of the simulation (the visual aids help tremendously!) I entered the second approach.

Second approach

During this approach, the goal was to lower the weekly costs and balance the orders between product received and product shipped out. Each week, starting with week 17, I would increase the order to the factory by 50% of the new orders received from the customers, which would be 150,000 orders to the wholesaler each week for the next four weeks. This approach reduced the weekly cost by $50,000 from the previous week because I was fulfilling the backorder by 50,000 per week; however, in the grand scheme, the cumulative costs were now...