Global Electronics. Inc.

Manufacturing Planning Problem

Constants
Direct Material Cost:
Circuit Board $8.00
Case $1.00
Battery $3.00
Touchscreen $7.00

Air Freight Shipping Cost: (Cost per mile for a 10,000 unit container)
Freight-In (Parts) $1.00
Freight-Out (Finished Goods) $1.20

Other Costs by Mfg Site: Phoenix Shanghai Monterrey

Direct Labor Cost per Unit $1.00 $0.40 $0.50
Overhead Cost per Unit $3.00 $1.00 $2.00
Site Capacity (units per month) 500,000 200,000 400,000

Monthly Demand by Distribution Center (finished units):

Atlanta, U.S. 220,000
Lagos, Nigeria 180,000
Rio De Janeiro, Brazil 210,000
Osaka, Japan 400,000
Frankfurt, Germany 200,000

Air Freight Distance Tables To/From: Manufacturing Site

(in miles) Phoenix Shanghai Monterrey
From Supplier Site
Singapore (Battery) 6,515 665 7,340
Beijing (circuit Board) 1,255 8,035 440
Mexico City (Case) 9,100 2,360 9,980
Nagoya (Touchscreen) 5,940 935 6,825
To: Distribution Center
Atlanta, U.S. 1,600 7,655 965
Lagos, Nigeria 7,410 7,610 6,875
Rio De Janeiro, Brazil 5,970 11,340 5,080
Osaka, Japan 6,030 850 6,910
Frankfurt, Germany 5,640 5,495 5,660

Manufacturing Cost Manufacturing Site

by site (per unit): Phoenix Shanghai Monterrey
Direct Material Cost $19.00 $19.00 $19.00
Air Freight In 2.28 $1.20 2.46
Direct Labor Cost $1.00 $0.40 $0.50
Overhead Cost $3.00 $1.00 $2.00
Total Mfg Cost per Unit $25.28 $21.60 $23.96
Production Assigned From: Manufacturing Site
To: Distribution Center: Phoenix Shanghai Monterrey
Atlanta, U.S. 1 1 1
Lagos, Nigeria 1 1 1
Rio De Janeiro, Brazil 1 1 1
Osaka, Japan 1 1 1
Frankfurt, Germany 1 1 1
Subtotal 5 5 5

Legend: Changing Cells

Optimization Cell
Problem

t container)

Brussels
$1.20
$4.00
250,000

):

g Site
Brussels

4,960
5,755
6,565
5,845

4,400
3,060
5,850
5,840
200

e
Brussels
$19.00
2.31
$1.20
$4.00
$26.51
Site Total Total Freight Total Cost
Brussels Subtotal Mfg Cost Out Cost by Destination
1 4 $97 $2 $99
1 4 $97 $3 $100
1 4 $97 $3 $101
1 4 $97 $2 $100
1 4 $97 $2 $99
5 $487 $12 $499
Total
Operating Cost
 Global Electronics. Inc. Manufacturing Planning Problem

Constants
Direct Material Cost:
Circuit Board $8.00
Case $1.00
Battery $3.00
Touchscreen $7.00

Air Freight Shipping Cost: (Cost per mile for a 10,000 unit container)
Freight-In (Parts) $1.00
Freight-Out (Finished Goods) $1.20

Other Costs by Mfg Site: Phoenix Shanghai Monterrey

Direct Labor Cost per Unit $1.00 $0.40 $0.50
Overhead Cost per Unit $3.00 $1.00 $2.00
Site Capacity (units per month) 500,000 200,000 400,000

Monthly Demand by Distribution Center (finished units):

Atlanta, U.S. 220,000
Lagos, Nigeria 180,000
Rio De Janeiro, Brazil 210,000
Osaka, Japan 400,000
Frankfurt, Germany 200,000

Air Freight Distance Tables To/From: Manufacturing Site

(in miles) Phoenix Shanghai Monterrey
From Supplier Site
Singapore (Battery) 6,515 665 7,340
Beijing (circuit Board) 1,255 8,035 440
Mexico City (Case) 9,100 2,360 9,980
Nagoya (Touchscreen) 5,940 935 6,825
To: Distribution Center
Atlanta, U.S. 1,600 7,655 965
Lagos, Nigeria 7,410 7,610 6,875
Rio De Janeiro, Brazil 5,970 11,340 5,080
Osaka, Japan 6,030 850 6,910
Frankfurt, Germany 5,640 5,495 5,660

Manufacturing Cost Manufacturing Site

by site (per unit): Phoenix Shanghai Monterrey
Direct Material Cost $19.00 $19.00 $19.00
Air Freight In 2.28 $1.20 2.46
Direct Labor Cost $1.00 $0.40 $0.50
Overhead Cost $3.00 $1.00 $2.00
Total Mfg Cost per Unit $25.28 $21.60 $23.96
Production Assigned From: Manufacturing Site
To: Distribution Center: Phoenix Shanghai Monterrey
Atlanta, U.S. 41225 56600 100000
Lagos, Nigeria 768 8776 50000
Rio De Janeiro, Brazil 643 76658 50000
Osaka, Japan 76000 100000 67000
Frankfurt, Germany 59225 11655 100000
Subtotal 177861 253689 367000

Legend: Changing Cells

Optimization Cell
Problem

t container)

Brussels
$1.20
$4.00
250,000

):

g Site
Brussels

4,960
5,755
6,565
5,845

4,400
3,060
5,850
5,840
200

e
Brussels
$19.00
2.31
$1.20
$4.00 `
$26.51
Site Total Total Freight Total Cost
Brussels Subtotal Mfg Cost Out Cost by Destination
28165 225990 $22,000,465 $86,359 $22,086,825
121454 180998 $17,620,427 $94,545 $17,714,972
88788 216089 $21,036,588 $197,586 $21,234,174
84000 327000 $31,833,941 $179,617 $32,013,558
29765 200645 $19,533,092 $116,403 $19,649,495
352172 $112,024,513 $674,511 $112,699,023
Total
Operating Cost
To: Distribution Center: Phoenix Shanghai Monterrey Brussels Total Operating Cost($)
Atlanta, U.S. 41225 56600 100000 28165 22072024.79
Lagos, Nigeria 768 8776 50000 121454 17670389.09
Rio De Janeiro, Brazil 643 76658 50000 88788 21171856.21
Osaka, Japan 76000 100000 67000 84000 31954701.78
Frankfurt, Germany 59225 11655 100000 29765 19648784.38
Total
Manufacturing Site Direct Labor Cost peDirect Material CosOverhead Cost per UAir Freight In
Phoenix $1.00 $19.00 $3.00 $2.28
Shanghai $0.40 $19.00 $1.00 $1.20
Monterrey $0.50 $19.00 $2.00 $2.46
Brussels $1.20 $19.00 $4.00 $2.31
Total
Total Operating Cost
$4,600,461.91
$5,661,890.92
$8,938,978.40
$9,517,459.48
Production Assigned Phoenix Shanghai Monterrey Brussels Subtotal Total Mfg Cost
Atlanta, U.S. 41225 56600 100000 28165 225990 $22,000,465
Lagos, Nigeria 768 8776 50000 121454 180998 $17,620,427
Rio De Janeiro, Brazil 643 76658 50000 88788 216089 $21,036,588
Osaka, Japan 76000 100000 67000 84000 327000 $31,833,941
Frankfurt, Germany 59225 11655 100000 29765 200645 $19,533,092
Subtotal 177861 253689 367000 352172 $112,024,513
Total Freight Out Cost Total Cost by Destination
$86,359 $22,086,825
$94,545 $17,714,972
$197,586 $21,234,174
$179,617 $32,013,558
$116,403 $19,649,495
$674,511 $112,699,023