Hello!

I really need help with the following exercise.... I have attached 2 documents. 1 with the instruction and another with charts that need to be filled out. Please let me know if you can help!

Calgary - marginal analysis-per tonne (1) (2) (3) (4) Shipping Freight Freight Tonnage pattern rate saving (5) Total freight saving (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Savings/ (costs) (t) ($) (t) (t) ($) ($) Calgary-total cost analysis-per tonne (1) (2) (3) (4) Shipping Freight Tonnage pattern rate (5) Total freight (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Total costs ($) (t) (t) ($) ($) ($/t) single car 25 cars 50 cars 100 cars 25 22 19 17 ($/t) single car 25 cars 50 cars 100 cars ($/t) (10) Added buffer stocks Buffer Stock Analysis (11) (12) (13) Added Corrected Shipping storage savings cycle costs (weeks) (t) (10) Added buffer stocks (11) Added storage costs (12) Corrected total costs (13) Shipping cycle (weeks) Toronto - marginal cost analysis-per tonne (1) (2) (3) (4) (5) Shipping Freight Freight Tonnage Total pattern rate saving freight saving ($/t) ($/t) (t) ($) (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Savings/ (costs) (t) (t) ($) ($) (10) Added buffer stocks (11) Added storage costs (12) Corrected savings (13) Shipping cycle (weeks) single car 25 cars 50 cars 100 cars Toronto-total cost analysis-per tonne (1) Shipping pattern (2) Freight rate ($/t) single car 25 cars 50 cars 100 cars (3) (4) Tonnage (5) Total freight (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Total costs (t) ($) (t) (t) ($) ($) (10) Added buffer stocks (11) Added storage costs (12) Corrected total costs (13) Shipping cycle (weeks) Calgary - marginal analysis-per car (1) (2) (3) (4) Shipping Freight Freight Carlots pattern rate saving ($/car) ($/car) (cars) (5) Total freight saving (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Savings/ (costs) ($) (t) (t) ($) ($) (10) Added buffer stocks (11) Added storage costs (12) Corrected savings single car 25 cars 50 cars 100 cars Calgary-total cost analysis per car (1) (2) (3) (4) Shipping Freight Carlots pattern rate ($/car) single car 25 cars 50 cars 100 cars (cars) (5) Total freight (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Total costs ($) (t) (t) ($) ($) (10) Added buffer stocks (11) Added storage costs (12) Corrected total costs Toronto - marginal cost analysis-per car (1) (2) (3) (4) (5) Shipping Freight Freight Carlots Total pattern rate saving freight saving ($/car) ($/car) (cars) (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Savings/ (costs) (t) (t) ($) ($) (5) Total freight (6) Required storage capacity (7) Average stocks in store (8) Storage costs (9) Total costs ($) (t) (t) ($) ($) ($) (10) Added buffer stocks (11) Added storage costs (12) Corrected savings (10) Added buffer stocks (11) Added storage costs (12) Corrected total costs single car 25 cars 50 cars 100 cars Toronto-total cost analysis-per car (1) (2) (3) (4) Shipping Freight Carlots pattern rate ($/car) single car 25 cars 50 cars 100 cars (cars) Inventory/Transportation Cost Trade-off Exercise In this exercise, you will explore the issue of trade-offs between inventory and other supply chain costs. The exercise uses the inventory costs concepts covered in session 3. Note that transportation costs normally drop as order size rises or as the order cycle lengthens. Also, please review the standard saw-tooth inventory model that was covered in session 3. In this exercise, candidates examine a portion of the supply chain for wheat flour. The entire supply chain for the sample company profiled here stretches from the farm to the consumer, and consists of: A raw material (wheat) source on the farm. A truck move from the farm to a local grain elevator. A move by truck to the flour mill. Subsequent movement of the flour in bulk by either truck or rail to either commercial bakers or to 2 packaging plants owned by the milling company. The mill is located in Winnipeg. The two packaging plants are located in Calgary and Toronto. The packaging plants package the flour into 5, 10, and 20 kilogram bags for retail sale. From the packaging plants, the flour moves by truck to local distribution centres. From the distribution centres the flour moves to retail grocery outlets for sale to consumers. Candidates will only need to look at one movement, and only one segment of the supply chain: between the mill and the two packaging plants. The relevant physical dimensions of the supply chain for the purposes of this exercise are as follows: The flour mill produces 500,000 tonnes (metric tons) of flour per year. The mill produces the flour at a steady pace. Daily, weekly, or monthly production can be found by dividing 500,000 by 360, 50 or 12 respectively. You may use these day, week, and month average figures in all your calculations. 70% of the flour is shipped to commercial bakeries and food processors. This part of the supply chain is not examined in this exercise. The remaining 30% of the flour is destined for the retail market, and is shipped by the mill to the packaging plants. The bagged flour also moves to retail outlets at a steady pace. Daily, weekly, or monthly shipments to the distribution centres can be found by dividing the annual shipments to the packaging plants by 360, 50 or 12 respectively. (These figures are averages, and account for the fact that during the weeks of Christmas and New Year's, things slow down. Using these average figures will make the calculations easier.) The shipment from the mill to the packaging centres is done in bulk, by rail. Each rail car holds 80 tonnes of flour. Two-thirds of the shipments go to the Calgary plant, and one-third goes to Toronto. Shipping Shipping is done on a regular basis. When a railway places cars at a shipper's facility for loading, it is called spotting cars, and the railway "spots" approximately 125 cars (500,000/(80x50)) each week at the mill. The mill loads the cars, and ships them to various destinations - commercial bakeries and to its Calgary and Toronto packaging plants. The cars arrive in a more or less even stream at all destinations. Because railway service has been good, and cars have moved regularly, storage space at the packaging plants is extremely limited. These arrangements allow the packaging centres to operate with only a minimum of bulk storage. Loaded rail cars are held until the plant can unload them. Since the mill has made no effort to organize its shipping, and simply consigns cars to various destinations in a haphazard way, the railway charges what are called "single car rates" for the shipments. This means that whether the mill ships one car, 10 cars or 25 cars to a specific destination on a specific day, the rate is the same. The Proposed Changes to the Supply Chain Operation The mill has decided to determine the net advantage that could be gained from using multiple car rates, and has assembled the information on the table seen on this screen. To get these rates, the packaging centres would have to unload the cars within 12 hours, and return the empty cars to the railway. The mill would have to build storage to accommodate the larger shipments, and these costs would have to be factored in. The company prepared the following analysis: If the mill decides to ship flour in multiple car shipments, and if the shipments have to be unloaded within 12 hours after arrival, it will have to build bulk storage facilities, and will have to absorb the carrying costs of that inventory. With these costs factored in, the annual carrying cost of the flour will be 25% of the value of product. The wholesale value of the flour is $350 per tonne. Senior management then posed three questions: Should we choose the incentive rate proposal? Should we ship in 25, 50, or 100 car lots? How much money will it save the company? These are the questions that you must answer in this exercise. Use the "Required Analysis" link at the bottom of this screen to obtain a full description of the requirements of this exercise. Exercise Preparation You will probably find it helpful to sketch the saw-tooth inventory curve that will result from the various shipping options at the two plants. It is suggested that you show the maximum and minimum inventory levels, and the time between shipments. You need only draw one copy of the graph, label these three variables on the graph, and then complete the table in the Trade-off Template below that shows these variables for each shipping option, to each destination. You may use 50 weeks in the year in calculating time between shipments; the solution to the problem is not sensitive to this calculation. Using 50 weeks makes the calculations simpler. Senior Management's Three Questions 1. Should we choose the incentive rate proposal? 2. Should we ship in 25, 50, or 100 car lots? 3. How much money will it save the company? The Required Analysis You must determine the savings that the company will realize from shipping in multi-car lots, and the extra inventory costs that it will incur in storing the flour at the packaging plants. The analysis should be done using this formula: Unit Costs ($ per tonne) x Relevant Tonnages (moved or stored) = Total Costs The analysis may use either total transportation costs under the various options, or the savings in transportation costs realized by multi-car shipments in comparison to single car rates (a marginal analysis). Complete the two tables: one for Calgary (include both Cost & Savings) and one for Toronto (include both Cost & Savings). To answer the third question posed by management (how much money will it save the company?), you will need to sum selected data from the two tables. Background Information The relevant physical dimensions of the supply chain for the purposes of this exercise are as follows: The flour mill produces 500,000 tonnes (metric tons) of flour per year. The mill produces the flour at a steady pace. Daily, weekly, or monthly production can be found by dividing 500,000 by 360, 50 or 12 respectively. You may use these day, week, and month average figures in all your calculations. 70% of the flour is shipped to commercial bakeries and food processors. This part of the supply chain is not examined in this exercise. The remaining 30% of the flour is destined for the retail market, and is shipped by the mill to the packaging plants. The bagged flour also moves to retail outlets at a steady pace. Daily, weekly, or monthly shipments to the distribution centres can be found by dividing the annual shipments to the packaging plants by 360, 50 or 12 respectively. (These figures are averages, and account for the fact that during the weeks of Christmas and New Year's, things slow down. Using these average figures will make the calculations easier.) The shipment from the mill to the packaging centres is done in bulk, by rail. Each rail car holds 80 tonnes of flour. Two-thirds of the shipments go to the Calgary plant, and one-third goes to Toronto. Exercise Sheet Complete the information and use it to work through your analysis. Flour Mill produces _________metric tonnes/year. _____% Production shipped to commercial bakeries. _____% Production shipped to Calgary and Toronto packaging. _____ Metric tonnes/year shipped to Calgary and Toronto. _____% of above (rounded to the nearest 1000) shipped to Calgary = ___(rounded) metric tonnes/year Flour Mill currently ships ________rail rates and want to determine_________ by using______ car rates. Each rail car holds ________tonnes. Storage cost/tonne = $_________/tonne. The Tables The tables, found in the Trade-Off Template, should include the following: The first column is titled \"Shipping Alternatives\" and will list the status quo, and the 25, 50 and 100-car shipping alternatives. One table for total cost and savings and one for savings. Include columns in the table that deal with transportation costs. It is important that you understand the concept of trade-offs as developed in Session 3, when completing the tables for this problem. Your goal is to calculate the trade-offs and find the best combination of shipping pattern and storage space. When you have completed the two tables, add the following analysis: Although this problem assumes both totally predictable and even demand for the product, and absolutely reliable and on-time transportation, neither assumption is completely realistic. This added analysis relaxes those assumptions slightly, by assuming some uncertainty in these two factors: The time between individual shipments of the 25, 50 or 100 car blocks is equivalent to a variable order cycle. Assume that the company decides that, for an order cycle over 3 weeks, it must guard against uncertainty in either demand or transportation. To do so, it adds another 1000 tonnes of safety stock to its packaging plant inventories when the order cycle exceeds three weeks. How would this operating policy change your conclusions? Complete either or both of your tables if required to show this analysis