Mr. Johnson, vice president of supply chain at x & co. thought that his current production…

The purpose of this assignment is to enable students to investigate, analyze and critique a process that allows decision making for optimizing logistics supply chain design at the tactical level which includes global logistics and distribution and warehousing design features. This may include utilizing linear programming techniques for optimizing supply chain networks.

Assessment 1consists of three parts

Assessment 1- Part A- Case study-1- Supply chain design of X & Co.

Designing the Production Network at X & Co.

Mr. Johnson, vice president of supply chain at x & co. thought that his current production and distribution network was not appropriate given the significant increase in Transportation costs over the past few years. Compared to when the company had set up its production facility in Chicago, Transportation costs had increased by a factor of More than four and were expected to continue growing in the next few years. A quick decision on building one or more new plants could save the company significant Amounts in Transportation expenses in the future.

X & Co.

X & was founded in the late 1970s and produced baby wipes and diaper ointment. The demand for the two products was as shown in Table 1. The company currently had one factory in Chicago that produced both Products for the entire country. The wipes line in the Chicago facility had a capacity of 5 million units, an annualized fixed cost of $5 million a year, and a variable cost of $10 per unit. The ointment line in the Chicago facility had a capacity of 1 million units, an annualized fixed cost of $1.5 million a year, and a variable cost of $20 per unit, the current transportation costs per unit (for both wipes and ointment) are shown in Table 2.

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