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LINKS Simulation Presentation

Firm 2, GTX
by

Tao Lu

on 15 February 2012

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Transcript of LINKS Simulation Presentation

LINKS Simulation Presentation

Presented by Firm 2 GTX

Tao Lu, Haojie Xu, Xiaowei Gao Procurement Manufacturing Distribution Transportation Service Level Generate Demand Information Technology Forecasting Research Last, our mistakes How did we work well? Therefore, our strategy is to provide products with
best value for money
high fill rate
reasonable price First, our goal in this game plausible profits
the best customer service
eminent market share
high forecasting accuracy Select suppliers with lower prices to gain better margin
Keep collaborating with these suppliers to gain procurement discount
Keep a low inventory level of raw materials Restrict unplanned production to save operation cost, reduced from 5000 to 2000
Keep a low inventory level of finished goods for DC 1, approximately 500 for each product Rented a DC in region 3 in the first month:
to better fulfill the orders in that region
to better serve the customers Select Carrier M for its lower prices
Use Air transportation for all products for region 2, and surface transporation for all products for region 3
Keep using Carrier M to gain transportation discount Set our service level to 4 - premium Changing price - only did once for increasing market share
Marketing expense - increased in region 2 channel 1 for the last month Used exponential smoothing as the way to forecast demands as we value all the historical data
We choose alpha = 0.6, an unuasual number, to react with changes quickly
We adjust the forecasting data each month accordingly to other related decisions, for example increased customer service level, increased marketing expense, decrease price in some channels, etc. Activate all necessary information technology for our suppliers and carriers to improve their performance
We know the tradeoffs between quality and price, so IT is the most important way for us to balance these two things In each month, we buy either
Regional summary to get a big picture
Market statistic to monitor the market
And, we bought the
price sensitivity analysis once for price changing Service Outsource

High Failure Rate Should own the DC in Region 3:
Launch postponement production could help us gain more profits;
Decrease the transportation costs;
Reduce duty and tariff

Reconsider the transportation carrier for Region 3:
Reduce unfilled orders;
Increase inventory turnovers;

Reconsider the raw materials suppliers:
Reduce failure rate;

Should more carefully study the LINKS Manual:
Learn how to better balance the tradeoff between cost and quality 29M Revenue
37% Margin Product cost from 47.8% to 43.5%
Service outsourcing from 4.8% to 7.4%
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