Minicase 3

200 pts

You work at Big Rig Trucking Co, a full service Third Party Logistics (3PL) firm. Big
Rig contracts with other companies to handle all of their distribution needs. These
primarily include transportation and warehousing, but can also include inventory
consulting as well.

You handle an account for Big Rig that operates primarily in the American Midwest.
The company manufactures a single product that is used by other manufacturing
firms. The firm operates factories in St. Louis and Springfield, and has customers in
Chicago, Memphis, Kansas City, and Indianapolis. The costs to ship one unit from
each factory to each customer are shown in the table below.

Kansas Indianapoli
Chicago City Memphis s
St. Louis 4 2 3 6
Springfiel
d 1 4 3 5

The St. Louis factory can product 5000 units per month. The smaller Springfield
factory can only produce 2000 units per month. Chicago has a contract to purchase
1500 units per month. Kansas City purchases 1000 units per month. Memphis
purchases 900 units per month, and Indianapolis purchases 1400 units per month.

1) 50 points

Draw a network model for this problem. You can use a program like Microsoft
Paint, you may use Word Shapes, or you may hand draw it and upload a picture of
your drawing.

2) 50 points

Write the formulation for this problem and implement the model in Excel Solver.
(Note: If you can’t get the model to run that is okay! Most of the points in this
problem relate to the problem formulation, and this problem is very much like the
problems in your book.)

What is your model output?

3) 50 points

Big Rig’s client is considering leasing manufacturing capacity from another firm in
Joliet. Setting this up would require a $1500 per month lease. The leased capacity
(which would be called Plant 3) would be 2000 units per month. It would cost $1 to
ship from Joliet to Chicago, $4 from Joliet to Memphis, $6 from Joliet to Kansas City,
and $3 from Joliet to Indianapolis. What changes to the problem formulation would
need to be made to allow for this change? Write the part(s) of the formulation that
are relevant to this change.

4) 50 points

Big Rig is considering investing in Connected Trucks for its drivers. The new trucks
would get real-time traffic updates and would use the onboard GPS to suggest
different routes to the drivers if there is heavy traffic or delays. Since several
manufacturers offer connected trucks, Big Rig would have to do some research to
determine which trucks to purchase. Big Rig’s purchasing department would then
need to negotiate a contract. Drivers would have to be trained to use the new
trucks, and the trucks would have to be deployed to the field. Finally, the old trucks
would have to be sold off to recoup some of the investment cost. A table of the
activities and their expected time (in weeks) is shown below.

Activity Description
A Research Trucks
B Purchase Trucks
C Train Drivers
D Train Mechanics
E Deploy New Trucks
F Sell Old Trucks
Predecesso Expected
r Time
- 3
A 1
A 2
A 3
B 3
E 2

What is the critical path, and what is the earliest time that the new trucks would be
fully in use in the field?

BONUS: 20 points Draw a network diagram for cooking Thanksgiving Dinner! Feel
free to be creative.