Reference no: EM133702110

DIGITAL SUPPLY CHAIN MANAGEMENT

Learning Outcome 1: Possess practical knowledge of algorithms, analytics, and artificial intelligence for harnessing data to make supply chain decisions.

Learning Outcome 2: Apply mathematical programming and optimization models in designing supply chain networks and processes;

Learning Outcome 3: Plan and execute supply chain management in different industrial settings.

Assignment Description:

To demonstrate business analytics skills and knowledge using different decision making and optimization methods (linear programming and application of Excel Solver) you will carry out the assignment.

Please give answers/solutions for each section beneath the questions.

PROBLEM A: Linear Programming model and application of excel solver

The company Gemma Hardware develops printers compatible with personal computers, both laser and inkjet. Profits from each laser printer amount to $35.00, while inkjet printers yield $15.00. The production process involves two assembly stages. Below is a table detailing the time required for processing per unit (measured in minutes), along with the total available processing time per department:

Printer	Dept A	Dept B
laser	10	14
ink jet	8	10
total time per day	240	360

To fulfill sales obligations, a minimum of 7 laser printers and 12 inkjet printers need to be manufactured daily. The company seeks to ascertain the optimal quantity of each printer to produce in order to maximize its profits.

Questions:
Define decision variables.
Formulate integer programming model (includes objective function and constraints), and;
Apply excel solver to solve the problem.

PROMLEM B: Decision analysis
Alliance Investment has a choice of investing in stocks (buying stocks 1 and 2) or keeping money in savings account. The probabilities that the prices of these stocks will go up, stay the same, or go down are 0.25, 0.30, and 0.45, respectively. If the prices go up, stock 1 will make $30,000 and stock 2 will make $10,000. If the prices remain unchanged, there will be break even. If prices go down, stocks 1 and 2 will sustain losses of $35,000 and $5,000, respectively.

If he keeps money in savings account, he is guaranteed a payoff of $5,000 as earning on interest. Some information from a broker regarding the degree of stability of future prices of stocks indicate favourable and unfavourable assessments by the following conditional probabilities

P(Favourable|Up)= 0.85	P(Unfavourable|Up)= 0.15
P(Favourable|Same)=0.50	P(Unfavourable|Same)=0.50
P(Favourable|Down)= 0.15	P(Unfavourable|Down)= 0.85

To assist Alliance investment with the decision, address below requests:

Define decision alternatives, states of nature, and consequence.
Develop a decision tree indicating branches along with probability values.
Using Bayes' Theorem compute posterior probabilities for both favorable and unfavorable scenarios (two tables).
Apply the expected value approach to make decisions as to whether Alliance Investment should invest or keep money in savings account. For this step show the application of expected value approach (Ev) and draw a clear decision tree showing the values and probabilities as well as the EV for each decision alternative.

PROMLEM C: Supply Chain model (Networking)
Each group needs to select a company from the list below and use the company's website to collect some background information and any type of preliminary information that could help in formulating the optimisation problem of the company. You will realise that there is no direct information about optimisation problems of the company that you choose therefore you will need to use the company's background information along with business analytics knowledge to formulate the problem. For instance, for an airline the problem could be assignment of terminals, airplanes, flights and pilots. Accordingly, and based on the preliminary information that you collect, you need to make assumptions and build up a model for the company and solve the problem.

The problem should be formulated based on Transportation, Transshipment, or Assignment problems (each group selects only one problem and only one company from below list. E.g. Transportation for Rio Tinto). As an example, you can choose any company in airline or Metro train industries (for assignment problem), in manufacturing or port shipment industries (for transhipment or transportation problem). Below is a list of companies/organisations and possible approaches to problem solving:

Transportation problem:
Amazon (Transportation of cargo from origin to destination) Rio Tinto (Transportation of cargo from origin to destination)

Transshipment problem by manufacturing companies:
Toyota (Transportation of parts from plants to warehouses and to customers from there) KIA (Transportation of parts from plants to warehouses and to customers from there)

Assignment problem by sales/servicing companies/organisations:
Quantas (assignment of terminals, airplanes, flights) V-line (assignment of trains to different lines)
Austin Hospital children emergency departmetn (assignment of surgery theatres)

Note: each group will submit three files:
Excel solution for case 1 Excel solver for case 3 Assignment in word document

Reference sources must be listed appropriately at the end in a reference list using either IEEE or APA referencing style.