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Case Problem S11.2 Global Supply Chain Management at Cantrex Apparel International 5209315 Cantrex Apparel International manufactures clothing items around the world. It has currently contracted with a U.S. retail clothing whole- sale distributor for men's goatskin and lambskin leather jackets for the next Christmas season. The distributor has distribution centers in Ohio, Tennessee, and New York. The distributor supplies the leather jackets to a discount retail chain, a chain of mall boutique stores, and a department store chain. The jackets arrive at the distribution centers unfinished, and at the centers the distributor adds a unique lining and label specific to each of its customers. The distributor has contracted with Cantrex to deliver the following number of leather jackets to its distribution centers in late fall: sol aux coitem diuo bu DISTRIBUTION GOATSKIN LAMBSKIN CENTER JACKETS JACKETS Ohio 1000 780 Tennessee 1400 950 New York 1600 1150 Cantrex has tanning factories and clothing manufacturing plants to produce leather jackets in Spain, France, Italy, Venezuela, and Brazil. Its tanning facilities are in Mende in France, Foggia in Italy, Saragosa 486 SUPPLEMENT 11 Operational Decision-Making Tools: Transportation and Transshipment Models in Spain, Feira in Brazil, and El Tigre in Venezuela. Its manufacture ing plants are in Limoges, Naples, and Madrid in Europe, and Slo Paulo and Caracas in South America. Following are the supplies of available leather from each tanning facility and the processing capa- city at each plant (in lb) for this particular order of leather jackets. rail, truck, and ship transport from Marseilles, and Caracas, and for ship ports in New Orleans, Jacksonville, and S rangements with trade specialists in these po legal import and export regulations able shipping capacity at each port plants to the ports are as follows: ind ship transport from the plants to ports in Lisbon, Caracas, and for shipping from these ports to U.S. Orleans, Jacksonville, and Savannah. Cantrex has ar- with trade specialists in these port cities to handle the "port and export regulations and documentations. The avail- mg capacity at each port and transportation costs from the LAMBSKIN SUPPLY (lb) ete 4400 TANNING FACTORY Mende Foggia Saragosa Feira El Tigre GOATSKIN SUPPLY (lb) 4000 3700 6500 5100 3600 5300 PLANTS PORTS ($/1b) MARSEILLES LISBON 4650 6850 Madrid 0.75 Naples bontott 3.45 1.05 135 C 5700 2.25 Limoges So Paulo Caracas Capacity (lb) CARACAS XX XX XX 1.15 0.20 9000 PLANT Madrid Naples Limoges So Paulo Caracas 0.60 XX XX 5500 XX XX 8000 PRODUCTION CAPACITY (lb) 7800 5700 8200 7600 6800 The shipping costs (s/lb) from each port in Europe and South America to the U.S. ports, and the available truck and rail capacity for transport at the U.S. ports are as follows. PORTS In the production of jackets at the plants 37.5% of the goatskin leather and 50% of the lambskin leather are waste (i.e., it is discarded dur- ing the production process and sold for other byproducts). After pro- duction, a goatskin jacket weighs approximately 3 lb and a lambskin jacket weighs approximately 2.5 lb (neither with linings, which are added in the United States). Following are the costs/lb (in U.S.$) for tanning the uncut leather, shipping it, and producing the leather jackets at each plant. Lisbon Marseille Caracas Capacity (lb) U.S. PORTS ($/lb) NEW ORLEANS JACKSONVILLE 2.35 1.90 3.10 2.40 1.95 2.15 8000 5200 SAVANNAH 1.80 2.00 2.40 7500 PLANTS ($/lb) TANNING FACTORY MADRID NAPLES LIMOGES SO PAULO CARACAS Mende 24 24 22 16 0 Foggia 31 31 1722 Saragosa 18 Feira XX XXXX XX El Tigre XX XXXX 14 Once in the United States, Cantrex outsources transportation to third-party logistics companies it has used previously, and it makes use of load match sites on the Internet. The transportation costs ($/1b) from the U.S. ports to the three distribution centers are as follows. 15 U.S. PORTS New Orleans Jacksonville Savannah DISTRIBUTION CENTERS ($/b) OHIO TENNESSEE NEW YORK 0.65 0.52 0.87 0.43 0.41 0.65 0.38 0.34 0.50 Note that the cost of jacket production is the same for goatskin and lambskin. Also, leather can be tanned in France, Spain, and Italy and shipped directly to the South American plants for jacket production, but the opposite is not possible (due to high tariff restrictions); that is, tanned leather is not shipped to Europe for production. Once the leather jackets are produced at the plants in Europe and South America, Cantrex uses load match sites and international s and international trade logistics (ITL) systems on the Internet to contract for available Cantrex wants to determine the least costly flow of materials and goods along this supply chain that will meet the demand at the U.S. distribution centers. Develop a transshipment supply chain model for Cantrex that will result in a minimum cost solution