Escolar Documentos
Profissional Documentos
Cultura Documentos
Inputs
Holding cost, H =
TL costs from plants to DCs =
LTL costs from DC to customers =
TL costs from plants to central whse. =
LTL cost from central whse. to cust. =
Reorder Interval, T =
Lead Time, L =
Target cycle service level, CSL =
Correlation Coefficient =
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6
5
0.95
0
All Regions
90.92
NA
26.43
NA
6.49
NA
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Part 1Cycle Inventory
106.44
67.83
Part 1 SS
38.08
35.35
Part 3 Cycle Inventory
7.44
12.45
Part 3 SS
17.24
33.82
Part 7 Cycle Inventory
1.44
2.19
Part 7 SS
10.80
7.75
Region 3
52.98
28.70
18.45
34.86
2.40
13.04
Region 4
35.43
18.98
18.48
36.88
5.82
20.51
All Regions
1000.12
NA
290.73
NA
71.39
NA
Cycle stock and required safety stock by part and region in days of demand
Region 1 Region 2 Region 3 Region 4 Region 5 All Regions
Part 1Cycle Inventory 3.00
3.00
3.00
3.00
3.00
3.00
Part 1 SS
1.07
1.56
1.62
1.61
7.29
1.60
Part 3 Cycle Inventory 3.00
3.00
3.00
3.00
3.00
3.00
Part 3 SS
6.95
8.15
5.67
5.99
2.59
5.38
Part 7 Cycle Inventory 3.00
3.00
3.00
3.00
3.00
3.00
Part 7 SS
22.50
10.61
16.30
10.57
8.55
11.37
$
$
$
$
$
$
$
$
$
Region 1
0.61
0.19
0.80
1.49
0.19
1.68
3.83
0.19
4.02
CR - 1/11/2014 12:45 AM
$
$
$
$
$
$
$
$
$
Region 2
0.68
0.19
0.87
1.67
0.19
1.86
2.04
0.19
2.23
Region 2
$72,171
$56,425
$41,626
$170,223
$
$
$
$
$
$
$
$
$
Region 3
0.69
0.19
0.88
1.30
0.19
1.49
2.89
0.19
3.08
Region 3
$56,964
$66,904
$63,051
$186,920
$
$
$
$
$
$
$
$
$
Region 4
0.69
0.19
0.88
1.35
0.19
1.54
2.04
0.19
2.23
Region 4
$37,982
$69,161
$110,336
$217,479
$
$
$
$
$
$
$
$
$
Region 5
1.54
0.19
1.73
0.84
0.19
1.03
1.73
0.19
1.92
All Regions
$
0.69
$
0.19
$
0.88
$
1.26
$
0.19
$
1.45
$
2.16
$
0.19
$
2.35
Region 5
All Regions
$21,260
$292,107
$56,259
$279,213
$124,747
$389,005
$202,266
$960,326
Page 1
$
$
$
$
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6.00
5.00
0.95
-
All Regions
90.92
NA
26.43
NA
6.49
NA
Central
90.92
12.27
26.43
12.15
6.49
6.45
All Regions
1000.12
NA
290.73
NA
71.39
NA
Central
1000.12
40.71
290.73
40.30
71.39
21.40
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Region 3
Region 4
Region 5
All Regions
Part 1Cycle Inventory
106.44
67.83
52.98
35.43
10.08
272.76
Part 1 SS
38.08
35.35
28.70
18.98
24.49
145.60
Part 3 Cycle Inventory
7.44
12.45
18.45
18.48
22.47
79.29
Part 3 SS
17.24
33.82
34.86
36.88
19.42
142.22
Part 7 Cycle Inventory
1.44
2.19
2.40
5.82
7.62
19.47
Part 7 SS
10.80
7.75
13.04
20.51
21.71
73.81
Central
272.76
66.96
79.29
66.28
19.47
35.20
$
$
$
$
$
$
$
$
$
Region 1
0.61
0.19
0.80
1.49
0.19
1.68
3.83
0.19
4.02
$
$
$
$
$
$
$
$
$
Region 2
0.68
0.19
0.87
1.67
0.19
1.86
2.04
0.19
2.23
Region 2
$72,171
$56,425
$41,626
$170,223
$
$
$
$
$
$
$
$
$
Region 3
0.69
0.19
0.88
1.30
0.19
1.49
2.89
0.19
3.08
Region 3
$56,964
$66,904
$63,051
$186,920
$
$
$
$
$
$
$
$
$
Region 4
0.69
0.19
0.88
1.35
0.19
1.54
2.04
0.19
2.23
Region 4
$37,982
$69,161
$110,336
$217,479
$
$
$
$
$
$
$
$
$
Region 5
1.54
0.19
1.73
0.84
0.19
1.03
1.73
0.19
1.92
Region 5
$21,260
$56,259
$124,747
$202,266
$
$
$
$
$
$
$
$
$
All Regions
0.69
0.19
0.88
1.26
0.19
1.45
2.16
0.19
2.35
All Regions
$292,107
$279,213
$389,005
$960,326
Savings:
$
$
$
$
$
$
$
$
$
Central
0.56
0.29
0.85
0.83
0.29
1.12
1.26
0.29
1.55
Central
Savings
$282,235
$9,872
$215,356
$63,857
$257,600 $131,405
$755,191
$205,135
Cost Savings from Centralization as a function of the correlation coefficient and target cycle service level
All parts
0.00
$362
$1,912
$3,595
$5,447
$7,514
$9,872
$12,643
$16,049
$20,576
$27,712
Correlation Cofficient
0.25
0.50
0.75
-$10,778
-$19,415
-$26,728
-$9,743
-$18,779
-$26,430
-$8,618
-$18,088
-$26,106
-$7,382
-$17,328
-$25,749
-$6,001
-$16,480
-$25,351
-$4,426
-$15,512
-$24,898
-$2,575
-$14,375
-$24,364
-$300
-$12,977
-$23,709
$2,724
-$11,118
-$22,837
$7,490
-$8,189
-$21,464
1.00
-$33,186
-$33,186
-$33,186
-$33,186
-$33,186
-$33,186
-$33,186
-$33,186
-$33,186
-$33,186
$63,857
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
0.00
$45,492
$48,484
$51,736
$55,311
$59,304
$63,857
$69,207
$75,785
$84,528
$98,308
Correlation Cofficient
0.25
0.50
0.75
$24,074
$7,384
-$6,776
$26,077
$8,616
-$6,197
$28,254
$9,955
-$5,569
$30,647
$11,427
-$4,878
$33,319
$13,071
-$4,107
$36,368
$14,947
-$3,227
$39,949
$17,150
-$2,193
$44,352
$19,858
-$922
$50,205
$23,458
$767
$59,429
$29,133
$3,430
1.00
-$19,294
-$19,294
-$19,294
-$19,294
-$19,294
-$19,294
-$19,294
-$19,294
-$19,294
-$19,294
$131,405
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
0.00
$98,719
$104,045
$109,832
$116,194
$123,300
$131,405
$140,927
$152,632
$168,193
$192,719
Correlation Cofficient
0.25
0.50
0.75
$60,890
$31,159
$5,844
$64,469
$33,365
$6,880
$68,357
$35,761
$8,006
$72,632
$38,395
$9,243
$77,407
$41,338
$10,626
$82,852
$44,693
$12,202
$89,250
$48,636
$14,054
$97,115
$53,483
$16,331
$107,571
$59,926
$19,357
$124,050
$70,081
$24,128
1.00
-$16,582
-$16,582
-$16,582
-$16,582
-$16,582
-$16,582
-$16,582
-$16,582
-$16,582
-$16,582
Type 3 only
Type 7 only
$74,186
$80,803
$87,992
$95,897
$104,725
$114,794
$126,624
$141,167
$160,499
$190,969
$19,128
$23,202
$27,628
$32,494
$37,929
$44,128
$51,411
$60,364
$72,266
$91,025
1.00
$9,872
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
Type 1 only
CR - 1/11/2014 12:45 AM
Correlation Cofficiant
0.50
0.75
$144,572
$154,441
$165,163
$176,952
$190,118
$205,135
$222,777
$244,466
$273,297
$318,739
0.25
0.00
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
$205,135
-$27,660
-$25,747
-$23,669
-$21,384
-$18,833
-$15,923
-$12,504
-$8,300
-$2,713
$6,094
-$69,062
-$69,062
-$69,062
-$69,062
-$69,062
-$69,062
-$69,062
-$69,062
-$69,062
-$69,062
Page 2
Section 8 - Case Study: ALKO (Part 1 is decentralized with all others centralized)
Inputs
Holding cost =
TL costs from plants to DCs =
LTL costs from DC to customers =
TL costs from plants to central whse. =
LTL cost from central whse. to cust. =
Reorder Interval =
Lead Time =
Target cycle service level =
Correlation Coefficient =
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6
5
0.95
0
All Regions
90.92
NA
26.43
NA
6.49
NA
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Part 1Cycle Stock
106.44
67.83
Part 1 SS
38.08
35.35
Part 3 Cycle Stock
Part 3 SS
Part 7 Cycle Stock
Part 7 SS
Costs per unit by region and part
Region 1
Inventory cost
$
0.61
Transportation cost
$
0.19
Total cost part 1
$
0.80
Inventory cost
Transportation cost
Total cost part 3
Inventory cost
Transportation cost
Total cost part 7
$
$
$
Region 2
0.68
0.19
0.87
Costs
$960,326
$755,191
$765,064
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
0.00
$701,631
$711,968
$723,197
$735,545
$749,335
$765,064
$783,542
$806,259
$836,457
$884,053
Region 4
35.43
18.98
290.73
40.30
71.39
21.40
Region 5 Central
10.08
24.49
79.29
66.28
19.47
35.20
$
$
$
Region 3
0.69
0.19
0.88
$
$
$
Region 4
0.69
0.19
0.88
$
$
$
Region 5
1.54
0.19
1.73
Central
$
$
$
$
$
$
Benchmark:
Region 3
52.98
28.70
Central
Region 3
$56,964
Region 4
$37,982
Region 5
$21,260
0.83
0.29
1.12
1.26
0.29
1.55
Central
$37,982
$21,260
Total logistic system:
$0
$215,356
$257,600
$472,956
$765,064
Correlation Cofficient
0.25
0.50
0.75
$760,877
$807,298
$846,772
$773,951
$822,516
$863,814
$788,154
$839,049
$882,328
$803,771
$857,228
$902,685
$821,213
$877,530
$925,421
$841,106
$900,686
$951,351
$864,477
$927,890
$981,815
$893,209
$961,335 $1,019,267
$931,403 $1,005,794 $1,069,054
$991,601 $1,075,866 $1,147,523
1.00
$881,717
$900,373
$920,641
$942,926
$967,815
$996,202
$1,029,552
$1,070,552
$1,125,054
$1,210,956
$56,964
$292,107
Savings
$195,262
-$9,872
Page 3
202984403.xls.ms_office - option1.0
Section 8 - Case Study: ALKO (Part 1 is decentralized with all others centralized except part3 in region5)
Inputs
Holding cost, H =
TL costs from plants to DCs =
LTL costs from DC to customers =
TL costs from plants to central whse. =
LTL cost from central whse. to cust. =
Reorder Interval, T =
Lead Time, L =
Target cycle service level, CSL =
Correlation Coefficient =
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6
5
0.95
0
All Regions
90.92
NA
26.43
NA
6.49
NA
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Part 1Batch Stock
106.44
67.83
Part 1 SS
38.08
35.35
Part 3 Batch Stock
Part 3 SS
Part 7 Batch Stock
Part 7 SS
Costs per unit by region and part
Region 1
Inventory cost
$
0.61
Transportation cost
$
0.19
Total cost part 1
$
0.80
Inventory cost
Transportation cost
Total cost part 3
Inventory cost
Transportation cost
Total cost part 7
$
$
$
Region 2
0.68
0.19
0.87
CR - 1/11/2014 12:45 AM
$
$
$
Region 3
0.69
0.19
0.88
Region 3
$56,964
$56,964
Region 4
35.43
18.98
$
$
$
Region 4
0.69
0.19
0.88
Region 4
$37,982
208.34
38.53
71.39
21.40
Region 5 Central
10.08
24.49
22.47
56.82
19.42
63.38
19.47
35.20
$
$
$
$
$
$
Region 5
1.54
0.19
1.73
0.84
0.19
1.03
Region 5
$21,260
$56,259
Central
$
$
$
$
$
$
0.68
0.29
0.97
1.26
0.29
1.55
Central
$37,982
$77,519
Total logistic system:
$0
$187,566
$257,600
$445,166
$793,533
1.00
$892,105
$910,762
$931,029
$953,315
$978,204
$1,006,590
$1,039,940
$1,080,940
$1,135,442
$1,221,345
Costs
$960,326
$755,191
Savings
$166,793
-$38,342
$793,533
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
0.00
$726,106
$737,094
$749,031
$762,156
$776,815
$793,533
$813,175
$837,322
$869,421
$920,014
Correlation Cofficient
0.25
0.50
0.75
$780,127
$822,962
$859,585
$793,611
$838,425
$876,739
$808,259
$855,222
$895,375
$824,365
$873,692
$915,865
$842,353
$894,320
$938,750
$862,868
$917,846
$964,851
$886,971
$945,486
$995,515
$916,602
$979,467 $1,033,214
$955,992 $1,024,637 $1,083,327
$1,018,076 $1,095,832 $1,162,312
Benchmark:
Region 3
52.98
28.70
Central
Page 4
202984403.xls.ms_office - option1.1
Section 8 - Case Study: ALKO (Part 1,3 is decentralized with part 7 centralized)
Inputs
Holding cost, H =
TL costs from plants to DCs =
LTL costs from DC to customers =
TL costs from plants to central whse. =
LTL cost from central whse. to cust. =
Reorder Interval, T =
Lead Time, L =
Target cycle service level, CSL =
Correlation Coefficient =
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6
5
0.95
0
All Regions
90.92
NA
26.43
NA
6.49
NA
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Part 1Batch Stock
106.44
67.83
Part 1 SS
38.08
35.35
Part 3 Batch Stock
7.44
12.45
Part 3 SS
17.24
33.82
Part 7 Batch Stock
Part 7 SS
Costs per unit by region and part
Region 1
Inventory cost
$
0.61
Transportation cost
$
0.19
Total cost part 1
$
0.80
Inventory cost
$
1.49
Transportation cost
$
0.19
Total cost part 3
$
1.68
Inventory cost
Transportation cost
Total cost part 7
$
$
$
$
$
$
Region 2
0.68
0.19
0.87
1.67
0.19
1.86
Region 5 Central
10.08
24.49
22.47
19.42
19.47
35.20
$
$
$
$
$
$
Region 3
0.69
0.19
0.88
1.30
0.19
1.49
$
$
$
$
$
$
Region 4
0.69
0.19
0.88
1.35
0.19
1.54
$
$
$
$
$
$
Region 5
1.54
0.19
1.73
0.84
0.19
1.03
Region 3
$56,964
$66,904
$123,869
Region 4
$37,982
$69,161
Region 5
$21,260
$56,259
Central
1.26
0.29
1.55
Central
$107,143
$77,519
Total logistic system:
$0
$0
$257,600
$257,600
$828,921
1.00
$862,423
$881,079
$901,347
$923,632
$948,521
$976,908
$1,010,258
$1,051,258
$1,105,760
$1,191,662
Costs
$960,326
$755,191
Savings
$131,405
-$73,730
$828,921
0.9
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99
0.00
$747,122
$760,452
$774,933
$790,856
$808,639
$828,921
$852,749
$882,044
$920,985
$982,362
Correlation Cofficient
0.25
0.50
0.75
$784,951
$814,681
$839,997
$800,028
$831,132
$857,617
$816,408
$849,004
$876,759
$834,418
$868,655
$897,807
$854,533
$890,602
$921,314
$877,474
$915,632
$948,124
$904,426
$945,040
$979,622
$937,561
$981,193 $1,018,345
$981,607 $1,029,252 $1,069,821
$1,051,031 $1,104,999 $1,150,953
Region 4
35.43
18.98
18.48
36.88
71.39
21.40
$
$
$
Benchmark:
Region 3
52.98
28.70
18.45
34.86
Central
Page 5
$279,213
202984403.xls.ms_office - option1.0a
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6
5
0.95
0
All Regions
90.92
NA
26.43
NA
6.49
NA
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Part 1Batch Stock
106.44
67.83
Part 1 SS
38.08
35.35
Part 3 Batch Stock
Part 3 SS
Part 7 Batch Stock
Part 7 SS
Costs per unit by region and part
Region 1
Inventory cost
$
0.61
Transportation cost
$
0.19
Total cost part 1
$
0.80
Inventory cost
Transportation cost
Total cost part 3
Inventory cost
Transportation cost
Total cost part 7
$
$
$
Region 2
0.68
0.19
0.87
CR - 1/11/2014 12:45 AM
Region 4
35.43
30.99
Region 5
50
290.73
40.30
71.39
21.40
Central
79.29
66.28
19.47
35.20
$
$
$
Region 3
0.69
0.19
0.88
$
$
$
Region 4
0.84
0.22
1.06
Region 5
Central
$
$
$
$
$
$
Benchmark:
Region 3
52.98
28.70
Central
Costs
$960,326
$755,191
Region 3
$56,964
$56,964
Region 4
$45,892
Region 5
$0
$45,892
$0
Total logistic system:
0.83
0.29
1.12
1.26
0.29
1.55
Central
$215,356
$257,600
$472,956
$751,714
Savings
$208,612
$3,478
Page 6
202984403.xls.ms_office - Option 2
$
$
$
$
$
0.15
0.09
0.10
0.05
0.24
6
5
0.95
0
All Regions
90.92
NA
26.43
NA
6.49
NA
Outputs
Cycle stock and required safety stock by part and region
Region 1
Region 2
Part 1Batch Stock
106.44
67.83
Part 1 SS
45.28
35.35
Part 3 Batch Stock
7.44
12.45
Part 3 SS
Part 7 Batch Stock
Part 7 SS
Costs per unit by region and part
Region 1
Inventory cost
$
0.64
Transportation cost
$
0.19
Total cost part 1
$
0.83
Inventory cost
$
0.45
Transportation cost
$
0.19
Total cost part 3
$
0.64
Inventory cost
Transportation cost
Total cost part 7
$
$
$
$
$
$
Region 2
0.68
0.19
0.87
0.45
0.19
0.64
Benchmark:
CR - 1/11/2014 12:45 AM
Costs
$960,326
$755,191
Region 3
52.98
28.70
18.45
Region 4
35.43
18.98
18.48
Region 5
Central
40.30
71.39
21.40
Central
22.47
66.28
19.47
35.20
$
$
$
$
$
$
Region 3
0.69
0.19
0.88
0.45
0.19
0.64
Region 3
$56,964
$28,733
$85,697
$
$
$
$
$
$
Region 4
0.69
0.19
0.88
0.45
0.19
0.64
Region 4
$37,982
$28,780
Region 5
$
$
$
0.45
0.19
0.64
Region 5
$34,993
$66,762
$34,993
Total logistic system:
Central
$
$
$
$
$
$
0.38
0.29
0.67
1.26
0.29
1.55
Central
$81,468
$257,600
$339,068
$737,337
Savings
$222,988
$17,854
Page 7
202984403.xls.ms_office - Option 3
Investment
Annual Cost Savings from Base Case
Base Case
$
960,326
$
850,000 $
755,191 $
205,135
$
650,000 $
765,064 $
195,262
$
300,000 $
828,921 $
131,405
$
600,000
751,714
208,612
Rate of return
NPV(10%)
24.1% $ 1,406,480
30.0% $ 1,497,884
43.8% $ 1,145,453
34.8% $ 1,694,734