A pharmaceutical plant is planning the production schedule for the next 4 months

Question

A pharmaceutical plant is planning the production schedule for the next 4 months, given the following demand forecast: Month Demand 1 234 800 600 600 250 Each month the plant can make 500 units using regular hours, at a cost of $30 a unit. During overtime the plant can produce 150 units at a cost of $40 a unit, and also the plant can outsource up to 100 more units at a cost of $45 a unit. Holding cost is $3a month, and shortage cost is just $1 a unit per period. What are the recommended production quantities and production mode (Regular, Overtime or Outsource) for each month? What is the total cost of this policy? Can you find a better solution? What is it?

Explanation / Answer

DHL is the one of the largest logistic company of the world. They operate in more than 230 countries. They provide all type of logistic service like personal shipment , business mails, parcels etc. They use all type of transportation like air , water and road.

Major components of the OM concept used are warehouse centers where goods are stored for different companies and then they are packed or parcels are created based on the request. Then other components are part of distribution system. Components are HUBs , line haul and distribution center.

Techniques used by them are very flexible. They are be modified or amended based on the customer need. As per normal process firstly origin and destination are defined along with the weight of and size of the parcels. Then TAT in which customer want to send them is defined. After that company will check its existing line haul or the best possible line haul which should be used in order to fulfill this requirement. Finally the distribution system is finalized. HUB and spoke model is used in most of the cases

Operation management system are important as they help companies to plan their process , procurement of goods, delivery of good and fulfill their business needs. They help in completing end to end cycle of the process. For product company it help in maintain supply chain or help in delivery of product. For end user or seller companies it help in getting the product that can be send. It also help in managing mail communication etc.

Next step is to develop more optimized way to managing things and improving its efficiency. System should be flexible in order to handle all requirements with no loss

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