Erken International

Introduction

This case discusses a transshipment problem faced by Erken Apparel International. Erken has contracted with a US retail clothing wholesale distributor for men’s goatskin and lambskin leather jackets for the next Christmas season. The distributor has distribution centers in Indiana, North Carolina, and Pennsylvania. The jackets arrive at the distribution center unfinished, where the finishing touches are added and then supplied to retail customers. Erken has a two stage manufacturing process for the jackets:

1) The tanned leather is shipped from tanning factories to the production plants in Europe and South America.

2) The manufactured products then move from the ports in Europe and South America to the US ports and finally to the distribution centers.

Erken Apparel wants to determine the least expensive shipment of materials and jackets that will meet the demand at the US distribution centers. This problem can be solved by developing a transshipment model or a minimum cost network.

Transshipment occurs when shipments go through one or more nodes before reaching their final destination. These transshipment nodes may be independent with no supply or demand of their own. Transshipment becomes significant when there is no direct route between the origin and final destination, due to various environmental factors. In such case, transshipment nodes act as connecting points between origin and destination. In real world problems, transshipment networks are huge and difficult to perceive. Thus, network diagrams are prepared to provide a bird’s eye view of the system, thus enabling a problem perceiver to visually interpret the system and enhance understanding.

Transportation Budget

As per results obtained from Solver, No. of Pounds of Goatskin shipped:

From Mende (Node 1) to Limoges (Node 8) = 4000

From Foggia (Node 2) to Naples (Node 7) = 3700

From Saragosa (Node 3) to Madrid (Node 6) = 6500

From Feira (Node 4) to Sao Paulo (Node 9) = 5100

From...