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PROJECT MANAGEMENT SCIENCE ADI LOGISTICS (TRANSPORTATION PROBLEM)

INTRODUCTION History
ADI Logistics (ADI) was established in 1994 to provide the most intelligent and efficient distribution, freight and trucking services network in the continental US. Today the company serves hundreds of manufacturers, importers and distributors, shipping to the largest retailers in the country.

Mission
At ADI, technology is used to enable end-to-end visibility and control, but also to help keep it simple. With an emphasis on customer care, ADI service reps are all management level. They, along with an individually tested and trained staff, convey a can-do attitude, best expressed by the company slogan, Expect a Miracle.

Vision
Adi is committed to provide selected logistics services and solutions in niche and growth markets delivering above-average returns to our customers and partners.

Basic Distribution Services include:


Pick and pack (by piece, SKU, style, etc.) Retail store distribution Replenishment/fulfillment programs Cross-docking and trans-loading GOH, open and hang, picking and storage High Density Storage Returns/reverse-logistics programs Inventory control (JIT) High Density Storage

Value-Added Services include:


Ticketing, marking and bundling Quality control inspections SKU/UPC verification and application Hanger/sizer/polybag application Quality control inspections Label/care label sewing EDI processing Label/care label sewing LPick ticket/invoice/UCC label printing

They have over 400,000 sq. ft. warehouse and distribution space in New Jersey and California

PROBLEM INTRODUCTION
ADI Logistics is a US-based logistics company providing trucking, freight and distribution services to different parts of US. It transports canned sea food mainly to its warehouses located at Minneapolis, Mason City, Oklahoma City and Rochester. Its supply centers providing freight services are located at Salt Lake City, New Jersey and Springfield. Due to increased demand perception by the company for the Christmas week, ADI Logistics formulates the following supply and Demand schedule from and to its different store locations.

MODEL BUILDING

SUPPLY CENTRES
1. SALT LAKE CITY 2. NEW JERSEY 3. SPRINGFIELD 450 TONNES 600 TONNES 500 TONNES

WAREHOUSE LOCATIONS
1. MINNEAPOLIS 2. MASON CITY 3. OKLAHOMA CITY 4. ROCHESTER 450 TONNES 200 TONNES 300 TONNES 300 TONNES

The cost of transportation per unit is given below :

PROCESSING DATA

Requirement Assumptions Each source has a fixed maximal supply of units. This supply is an upper bound on the number of units that can be shipped from the source. Each destination has a fixed minimal demand of units. This demand is a lower bound on the number of units that must be shipped to the destination.

Cost Assumptions The cost of distributing units from any particular source to any particular destination is directly proportional to the number of units distributed. Therefore, this cost is just the unit cost of distribution times the number of units distributed. There are no fixed costs.

FORMULATION

Finding the cost of transportation using least-cost method :

SOLVING IN EXCEL

SENSITIVITY REPORT

ANALYSIS AND INTERPRETATION

Cost of per unit supply from Salt Lake City to Minneapolis = $150 Cost of per unit supply from Salt Lake City to Rochester = $300 Cost of per unit supply from New Jersey to Minneapolis = $100 Cost of per unit supply from New Jersey to Mason City = $200 Cost of per unit supply from Springfield to Minneapolis = $200 Cost of per unit supply from Springfield to Oklahoma City = $300

Total cost of supply from Salt Lake City to Minneapolis = $150 * 393 = $58,950 Total cost of supply from Salt Lake City to Rochester = $300 * 360 = $108,000 Total cost of supply from New Jersey to Minneapolis = $100 * 750 = $75,000 Total cost of supply from New Jersey to Mason City = $200 * 348 = $69,600 Total cost of supply from Springfield to Minneapolis = $200 * 534 = $106,800 Total cost of supply from Springfield to Oklahoma City = $300 * 365 = $109,500

Total cost = $58,950 + $108,000 + $75,000 + $69,600 + $106,800 + $109,500 = $527,850

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MANAGERIAL RECOMMENDATION

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BIBLIOGRAPHY

http://www.ebscohost.com/ http://www.adilogistics.com/

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