Andrew-Carter, Inc.

1
Andrew-Carter, Inc.

• Issue Due to the economic depression, A-C
  considers to close one of its 3 plants. The
  objective is to minimize the Cost.
• Setup
• 1. Make a tabular
• 2. P1, P2, P3 are the Plants 1, 2, 3
• 3. r regular time o overtime
• 4. W1, W2, W3, W4, W5 are the Warehouses 1, 2,
  3, 4, 5
• 5. in cells is the variable cost per unit (
  Variable cost in Table 10.40 Distribution cost
  from Table 10.41)
• 6. Perform the comparative analysis by using QM
  for Windows or Excel.

2
W1 W2 W3 W4 W5 Supply
P1r 3.30 2.800.5 3.24 3.29 3.26 3.36 27,000
P1o 4.02 3.96 4.01 3.98 4.08 7,000
P2r 3.18 3.30 3.28 3.34 3.35 20,000
P2o 3.88 4.00 3.98 4.04 4.05 5,000
P3r 3.28 3.25 3.32 3.26 3.07 25,000
P3o 3.98 3.95 3.93 3.96 3.77 6,000
Demand 9,000 13,000 11,000 15,000 8,000 90,000 56,000
3
Using QM for Windows

• Assume Plant 1 is Closed
• Start QM for Windows
• Select Module Menu
• Select Transportation
• Select File Menu
• Select New
• Define Data set for Transportation

4
Using QM for Windows

• Fill in data grid with problem data from the
  Tabular without P1

Solve the problem by clicking the solve button
5
Using QM for WindowsTotal Variable Cost without
P1 188,360
The solution can be viewed in the data grid
6
Using QM for Windows
Assume Plant 2 is Closed Select File
Menu Select New Define Data set for
Transportation
7
Using QM for Windows

• Fill in data grid with problem data from the
  Tabular without P2

Solve the problem by clicking the solve button
8
Using QM for WindowsTotal Variable Cost without
P2 183,430
The solution can be viewed in the data grid
9
Using QM for Windows
Assume Plant 3 is Closed Select File
Menu Select New Define Data set for
Transportation
10
Using QM for Windows

• Fill in data grid with problem data from the
  Tabular without P3

Solve the problem by clicking the solve button
11
Using QM for WindowsTotal Variable Cost without
P3 189,930
The solution can be viewed in the data grid
12
Use Excel Solver to solve the question

• Open Excel
• Select QM and Transportation from the menu bar

13
Excel Solver

• Fill in the spreadsheet initialization as
  follows

14
Excel SolverWithout P1

• Fill in the tabular after enter the spreadsheet
  initialization and click OK
• Select tool and solver from menu bar

15
Excel SolverWithout P1

• Set Solver Parameters as follows
• Then click solve
• View the solution

16
Excel Solver without P2

• Repeat the Steps in Slides 12 and 13
• Fill in the tabular after enter the spreadsheet
  initialization and click OK
• Select tool and solver from menu bar

17
Excel Solverwithout P2

• Set Solver Parameters as follows
• Then click solve
• View the solution

18
Excel Solver without P3

• Repeat the Steps in Slides 12 and 13
• Fill in the tabular after enter the spreadsheet
  initialization and click OK
• Select tool and solver from menu bar

19
Excel Solverwithout P3

• Set Solver Parameters as follows
• Then click solve
• View the solution

20
Conclusion

• From the result of QM for windows or Excel
  Solver, We conclude that

Without Total Variable Cost
P1 188,360
P2 183,430
P3 188,930
21
Discussion Question 1

• Evaluate the various configurations of operating
  and closed plants that will meet weekly demand.
  Determine which configuration minimizes total
  costs.
• To close the Plant 2 minimize total cost because
  by closing the Plant 2 will minimize the total
  variable cost.

22
Discussion Question 2

• Discuss the implications of closing a Plant.
• To minimize the cost is to determine the lowest
  total variable cost for closing the plant.