Module Title: Models for decision
Anonymous Student Number: Z0951700
Submission Deadline: 7th, Aprial
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Research method and structure
This essay is a report to Indulgence Foods’ board for giving recommendations on their new market approach’s plant locations and phasing. The working process are showed in the following figure.
Figure 1： Research method and structure
Indulgence Foods is planning a new operation to supply to the West of England, where they will sell to wholesalers in the bellowing eleven towns and cities. As the current operational model is to establish a number of manufacturing plants from which finished goods are distributed to wholesalers, we will keep on using this existed mature model to set up the operation in West of England as well.
Demand and max plant capacity of each city have been given below, as we can operate at different scales, there will be no significant minimum plant capacity limit. From the given data, we can set up our initial objective as to fulfill the demand by the capacity with an optimal strategy.
Straight line distances between city pairs have been given, from which we can see that due to the difference of distances between cities, transportation cost will be different as well.
Decision making strategy
Based on the analysis of our task, an overall decision making flow has been built as shown below.
There are several main factors will have impact on our final decision, such as each city’s demand and capacity, transportation cost, property cost and vehicle cost ; as well as lots of less important factors will have impact on our decision, such as local human resource situation. However, to avoid information overload and to generate an executable strategy, it is better to consider the main factors first and decompose them into different steps.
The whole strategy can be decomposed into 5 steps as shown below, within each step the clear objectives are being addressed and the factors or constrains which will impact decisions are analysed.
First, as we wishes to locate no more than 5 plants among these 11 cities, we have to find out which 5 cities are the best choices. At this stage, given the demand and capacity data of each city, and the distances between city pairs, the main factor we concerned is transportation cost. Therefore, using a linear programme to minimize the transportation cost is our objective of this stage.
Secondly, after getting the result of which 5 cities are the best choices based on minimizing transportation cost strategy, we will try to set up a staged implementation strategy to determine the opening order of these 5 cities. The main goal of this strategy is to save capital investment, which is also a way to reduce risk for business.
Thirdly, since we have already had 5 cities to locate our plants, it is important to find the optimal property locations in the particular city. Using multiple attribute analysis, considering 7 main attributes of a property and 20 alternative property choices in each city, we will find the optimal property locations in each city based on our evaluation.
Fourthly, given the opening order of 5 cities, the vehicle purchase decisions can be made now. The main objective is to minimize vehicle operating cost, by which we have to consider vehicle price, fuel efficiency and vehicle load capacity.
The last step of our decision making