Excel Logistics Case Essay

PurposeTo introduce participants to the supply strand concept and to the effects decisions along the chain have on inventory levels and be. Introduction In this bet on the retailer sells cases of beer to a consumer and puts cases of beer from the middleman the wholesaler sells cases of beer to the retailer and orders cases of beer from the distributor and the distributor sells cases of beer to the wholesaler and orders beer from the factory (brewery). The factory brews the beer.The beer supply chain is shown belowPlayers of the game to separately one take on a different role in the supply chain. The roles be the Factory, Distributor, interlocutor and Retailer. Each position is directly linked, and beer movenot skip the adjacent position. For example, the Wholesaler orders beer from the Distributor, and ships beer to the Retailer. An important consideration in do decisions is the counteract in the movement of beer through the supply chain. It takes three periods to move an order of beer between individually fake in the supply chain. If during period 3 the Wholesaler decides to ship 10 cases of beer to the Retailer, the beer would take periods 4 and 5 to move to the Retailer and then would be available for sale by the Retailer at the beginning of period 6. Similarly, orders are not visible to the upstream player for one period. For example, if the Wholesaler places an order in period 3, the order is received by the Distributor at the beginning of period 4. For each period of play, every participant follows the same cycle1. The system is updated by your teacher where new orders and shipments are received, shipments enroute are advanced, and inventory levels and backorder positions are calculated (these tasks are done automatically by the server program. 2. The player updates the locating screen and reviews new position. 3. A shipping decision is made according to new orders and backlog, p set asideent to inventory availability, 4. An ordering decisi on is made for more beer.There are only two tolls involved in this simplified version of a logisticssupply chain inventory holding cost ($1.00/case/period) and back order cost ($2.00/case/period). Each team has the goal of minimizing the sum of these cost by balancing the cost of having inventory (inventory holding cost) with the cost of being out of inventory when a customer orders beer (back order cost). The server program keeps track of the costs incurred by each team. At the end of the game, the total game cost for the distribution system is the sum of the four individual participants total costs (retailer cost + wholesaler cost + distributor cost + factory cost). The goal is to minimize team costs. execution The game begins with a fully-loaded pipeline of cases of beer 16 cases of inventory in each positions current inventory, 4 cases in each of the production delay pipeline, 4 cases in each of the shipping delay pipeline, each position has an initial order for 4 cases of be er.DefinitionsThe following terms are used in the status report Current Demand This is the demand for the current period at this position. For the Retailer, this demand is fit(p) by an external demand stream. For all other positions, this demand reflects an order placed by the downriver position in the supply chain during the introductory period. Backorder This is the demand that has not been met to date at this position. When a position does not meet demand by shipping cases of beer, the backorder amount is increased. This amount does not implicate the demand during the current period. Current Shipment This is the amount that is being shipped to the downstream position during the current period. afterwards the ordering and shipping decisions have been made, the status button can be used to update the status report. The status report will reflect the current order and shipment decisions. Remember that after the instructor has updated the system, the status button should be p ressed again to receive a report that reflects the execution of the decisions for the previous period. On Hand This is the current amount in inventory at the position.This is the total amount that can be shipped this period from this position. Due Next Period This is the number of units that are scheduled to arrive at this position next period. Due In Two Periods This is the number of units that are scheduled to arrive in two periods. Current Order Release This is the number of units that are being ordered from the upstream position. Theupstream position will not see this order until after the system has been updated to the next period. Inventory live This is the cumulative inventory cost for this position. This is calculated from the actual inventory balance at the end of each simulated period. During the update process, the system first ships material to the downstream position, updates the cumulative inventory and backorder costs found on the inventory and backorder levels , and then receives new material into the position. Backorder price This is the cumulative backorder cost for the position. Total Cost This is the total cumulative cost for the position.