Supply Chain Coordination with Commodity Products
KAR Customer
Monthly Demand 10,000 10,000
Fixed Order Cost 4,000.00R$ 100.00R$
Holding Cost 20% 20%
Cost 2.50R$ 4.00R$
Sale Price 4.00R$
Calculated Lot Size 5,477
Sum of Order and Holding Cost 89,004.92R$ 4,381.78R$
Material Cost 300,000.00R$ 480,000.00R$
Supply Chain Order + Holding Cost 93,386.70R$
Material + Order + Holding Costs 389,004.92R$ 484,381.78R$
Optimal Lot Size 27,512
Sum of Order and Holding Costs 24,324.84R$ 11,441.06R$
Total Order and Holding Costs 35,765.91R$
Savings from Optimization 64,680.07R$ 7,059.28-R$
Total Savings from Optimization 57,620.79R$
Cell D9 contains the order placed by the supermarket chain when acting independently.
Cell B10 contains KAR’s order + holding cost with this order size and
Cell D10 contains the supermarket chain’s costs.
Cell D15 contains the optimal order size that minimizes supply chain (KAR + supermarket chain)
order + holding costs.
Cell B16 contains KAR’s costs and Cell D16 contains supermarket chain’s
costs with the supply chain optimal order size (in Cell D15). Use Solver to get this number.
Cell B19 contains KAR’s gains if the supermarket chain orders the supply chain
optimum. Cell D19 contains the supermarket chain’s loss if it orders supply chain optimum.
Cell D20 contains supply chain savings if supermarket chain orders supply chain optimum.
Supply Chain Coordination with Commodity Products
KAR Customer
Monthly Demand 10,000 10,000
Fixed Order Cost 400.00R$ 100.00R$
Holding Cost 20% 20%
Cost 2.50R$ 4.00R$
Sale Price 4.00R$
Calculated Lot Size 5,477
Sum of Order and Holding Cost 10,132.87R$ 4,381.78R$
Material Cost 300,000.00R$ 480,000.00R$
Supply Chain Order + Holding Cost 14,514.65R$
Material + Order + Holding Costs 310,132.87R$ 484,381.78R$
Optimal Lot Size 9,608
Sum of Order and Holding Costs 7,397.92R$ 5,092.08R$
Total Order and Holding Costs 12,490.00R$
Savings from Optimization 2,734.95R$ 710.29-R$
Total Savings from Optimization 2,024.65R$
Cell D9 contains the order placed by the supermarket chain when acting independently.
Cell B10 contains KAR’s order + holding cost with this order size and
Cell D10 contains the supermarket chain’s costs.
Cell D15 contains the optimal order size that minimizes supply chain (KAR + supermarket chain)
order + holding costs.
Cell B16 contains KAR’s costs and Cell D16 contains supermarket chain’s
costs with the supply chain optimal order size (in Cell D15). Use Solver to get this number.
Cell B19 contains KAR’s gains if the supermarket chain orders the supply chain
optimum. Cell D19 contains the supermarket chain’s loss if it orders supply chain optimum.
Cell D20 contains supply chain savings if supermarket chain orders supply chain optimum.