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Optimal Infrastructure Group

Names:
Hesham Jawadi
Diana Sanchez
Muhammad Zia Khan
CASE OVERVIEW
ISSUES
Variables given in the case
Questions To be Answered
It's better for SportsStuff.com to spread their network across varies cities
We recommend management to use the non-linear method in solver because it provides the lowest total cost for SportsStuff.com

UPS Transportation costs per every 4 units
Customer flat fee charge of $3.00 per 4 units
Inventory cost =$475,000 Y+ 0.165F
Regional Demands
Fixed and variable warehousing costs
1. What is the cost SportStuff.com incurs if all warehouses leased are in St. Louis?

2. What supply chain network configuration do you recommend for SportStuff.com? Why?

3. How would your recommendation change if transportation costs were twice those that are given?
Recommendations
Managing growth at SportStuff.com
Sanjay team clearly saw that costs would grow faster than revenues if the demand continued to grow and the supply chain network is not redesigned
The company needed more warehouse space to cope with the anticipated demand growth.
Overall goal is to find an optimal model solution that lowers total transportation and warehousing costs
In 2004, Sanjay Gupta founded SportStuff.com
Mission: To supply parents with more affordable sports equipment for their children.
SportStuff.com purchased used equipment and jackets from families and any surplus from manufacturers and retailers and sold these on the SportStuff.com website
Demand sales exploited rapidly to $0.8 million(One Year)
Two Options
1- St. Louis Warehouse

2- Different cities warehouses.
St. Louis 2007
St. Louis 2008
St. Louis 2009
St. Louis 2010
Linear Programing - All Warehouses 2008
Linear Programing - All Warehouses 2009
Linear Programing - All Warehouses 2010
Nonlinear Programing - All Warehouses 2008
Nonlinear Programing - All Warehouses 2009
Nonlinear Programing - All Warehouses 2010
St. Louis Cost Chart
Cumulative Cost Chart
Question ?
Thank you