Question 1 (45 marks) Alpha Imaging Equipment (AIE) specializes in design, manufacturing and marketing of various types of medical imaging equipment. AIE's vision is to help healthcare providers predict, diagnose, inform and treat disease earlier so that every individual can live life to the fullest. Its mission is to offer the best quality and service on medical imaging equipment at affordable prices. AIE's imaging equipment helps provide a fast, non-invasive way for doctors to see broken bones, diagnose trauma cases in the emergency room, view the heart and its function, or identify the early stages of cancers or brain disorders. AIE has two major product groups: Digital X-Ray System (DXS) and Molecular Imaging System (MIS). DXS is designed to address hospitals' diagnostic needs whilst meeting their economical demands. MIS products are expensive, state-of-the-art medical equipment designed for meeting the diagnostic needs in radiology, oncology, neurology and cardiology. The production of MIS products requires excellent quality of both purchased parts and in-house production processes. AIE promises its customers on-time quick delivery, with a maximum order fulfilment lead time of 3 weeks for all MIS products. AIE has a dedicated manufacturing plant in Germany to produce MIS and three manufacturing plants in US, Thailand and Brazil to produce DXS. AIE has three distribution centres (DCs) to handle global distribution of AIE's two product groups, and they are in Singapore, Rotterdam and Los Angeles. The diagram below shows the AIE's production and distribution network for DXS: Asia US Plant Singapore DC Thailand Plant Rotterdam DC Europe Brazil Plant Los Angeles DC North America The relevant data about the above network is given in the tables below. DXS production capacity (units/year) Unit production cost of ($/unit) US Plant 7,000 100,000 Thailand Plant 7,000 85,000 Brazil Plant 8,000 90,000 DXS handling capacity (units/year) DC unit handling cost ($/unit) Singapore DC 7,000 500 Rotterdam DC 10,000 850 Los Angeles DC 10,000 1000 Question 1 (cont'd) US Plant Thailand Plant Brazil Plant Asia Market Europe Market North America Market Unit transportation cost ($/unit) Singapore DC Rotterdam DC Los Angeles DC 120 150 60 120 160 200 220 160 100 130 120 140 100 120 160 130 100 80 Asia Market Europe Market North America Market Annual DXS demand (units) 5,500 6,000 6,000 (a) Discuss the order winners of each AIE's product group and identify appropriate logistics priorities for its distribution network. (5 marks) (b) Identify appropriate performance indicators for distributing DXS and MIS. Should AIE use the DXS's distribution network to distribute MIS? Why? (5 marks) Question 1 (45 marks) Alpha Imaging Equipment (AIE) specializes in design, manufacturing and marketing of various types of medical imaging equipment. AIE's vision is to help healthcare providers predict, diagnose, inform and treat disease earlier so that every individual can live life to the fullest. Its mission is to offer the best quality and service on medical imaging equipment at affordable prices. AIE's imaging equipment helps provide a fast, non-invasive way for doctors to see broken bones, diagnose trauma cases in the emergency room, view the heart and its function, or identify the early stages of cancers or brain disorders. AIE has two major product groups: Digital X-Ray System (DXS) and Molecular Imaging System (MIS). DXS is designed to address hospitals' diagnostic needs whilst meeting their economical demands. MIS products are expensive, state-of-the-art medical equipment designed for meeting the diagnostic needs in radiology, oncology, neurology and cardiology. The production of MIS products requires excellent quality of both purchased parts and in-house production processes. AIE promises its customers on-time quick delivery, with a maximum order fulfilment lead time of 3 weeks for all MIS products. AIE has a dedicated manufacturing plant in Germany to produce MIS and three manufacturing plants in US, Thailand and Brazil to produce DXS. AIE has three distribution centres (DCs) to handle global distribution of AIE's two product groups, and they are in Singapore, Rotterdam and Los Angeles. The diagram below shows the AIE's production and distribution network for DXS: Asia US Plant Singapore DC Thailand Plant Rotterdam DC Europe Brazil Plant Los Angeles DC North America The relevant data about the above network is given in the tables below. DXS production capacity (units/year) Unit production cost of ($/unit) US Plant 7,000 100,000 Thailand Plant 7,000 85,000 Brazil Plant 8,000 90,000 DXS handling capacity (units/year) DC unit handling cost ($/unit) Singapore DC 7,000 500 Rotterdam DC 10,000 850 Los Angeles DC 10,000 1000 Question 1 (cont'd) US Plant Thailand Plant Brazil Plant Asia Market Europe Market North America Market Unit transportation cost ($/unit) Singapore DC Rotterdam DC Los Angeles DC 120 150 60 120 160 200 220 160 100 130 120 140 100 120 160 130 100 80 Asia Market Europe Market North America Market Annual DXS demand (units) 5,500 6,000 6,000 (a) Discuss the order winners of each AIE's product group and identify appropriate logistics priorities for its distribution network. (5 marks) (b) Identify appropriate performance indicators for distributing DXS and MIS. Should AIE use the DXS's distribution network to distribute MIS? Why