Supply Chain Decision Support Systems ISyE3103

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Supply Chain Decision Support SystemsISyE3103
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Demand Planning

• Accurate demand forecasts are critical for the
  efficiency of the entire supply chain.
• Uses statistical tools
• Demand forecast is part of the input for most of
  the supply chain decision support systems.
• We will start discussing forecasting today.

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Logistics Network Design

• Determines
• Warehouse and factory locations
• Assignment of retailers or customers to
  warehouses
• Input
• Candidate locations
• Transportation costs
• Aggregate demand forecasts

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Inventory Deployment

• Determines which inventory to keep at what level,
  in which warehouses, and at what times.
• Input
• Transportation costs
• Demand forecasts
• Inventory holding costs

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Sales and Marketing Region Assignment

• Determines assignments of sales representatives
  to marketing regions so that both the customers
  and the sales representatives are happy while
  sales are maximized.
• Input
• Customer locations
• Demand forecasts

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Distribution Resource Planning (DRP)

• Determines the routes and the inventory policies
  for a set of warehouses and retailers.
• Input
• Warehouse and retailer locations
• Transportation costs
• Demand forecasts

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Material Requirements Planning (MRP)

• Uses a products bill of materials (BOM) and
  component lead times to plan when manufacturing
  of a particular product should begin.
• Very popular in the industry
• BUT often creates impossible schedules because it
  does not take production capacities into account
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• Decision maker creates a feasible schedule by
  modifying the MRP output.

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Inventory Management

• Inventory management is complicated when many
  different items are present
• Proposes inventory policies with low cost and
  high customer service.
• Input
• Transportation costs
• Inventory holding costs
• Lead times
• Demand forecasts

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Production Location Assignment and Facility
Deployment

• Given a network of production facilities being
  capable of producing particular products,
  suggests possible assignments of products to
  manufacturing facilities.
• Input
• Transportation costs
• Inventory holding costs
• Lead times
• Demand forecasts

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Fleet Planning

• Determines how to send out products with a firms
  own truck fleet and/or commercial carriers.
• Difficulties
• Complex rate structures (e.g. TL vs LTL)
• Usually a dynamic decision making problem
• Two examples
• Mobil 77 of routes are different than a manual
  system and saves 1 million annually
• CSX Computer aided routing and scheduling (CARS)
  generates routes very similar to the manually
  generated ones without taking into account all
  the business rules. BUT this also implies that it
  is not very cost effective.

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Lead Time Quotations

• Sales representatives need to quote delivery lead
  times in real time while taking orders.
• Usually quoted lead times are longer than
  necessary to guarantee delivery by the promised
  date.
• Determines accurate lead times by taking the
  current production schedules, manufacturing
  times, and delivery times into account.

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Production Scheduling

• Proposes a manufacturing sequence and schedule by
  considering
• Products
• Processes
• Due dates
• Precedence relationships.

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Workforce Scheduling

• Proposes a possible employee schedule to ensure
  necessary labor is available at all time by
  considering
• Production schedules
• Labor costs
• Set of work rules
• FEDEX used such a system during negotiations on
  work rules with its pilots.