Business Development: Supply Chain Optimization Cost Analysis Project

This project presents a detailed analysis of different supply chain options, focusing on cost optimization. It evaluates five distinct scenarios involving the flow of goods from three plants to two customers, considering warehouse distribution. Each option outlines the quantity of goods transported, the routes taken, and the associated costs. The analysis includes the plant capacities, customer demands, and transportation costs, and determines the total cost for each option. Ultimately, the project concludes that Option 4 is the most cost-effective solution, providing a comparative analysis to optimize the supply chain for the lowest possible cost. The analysis shows the movement of goods between plants, warehouses, and customers, along with the associated costs, leading to the identification of the most efficient and economical supply chain strategy.

As presented in the excel file the maximum capacity of Plant 1
is 300 tonne, Plant 2 is 300 tonne and Plant 3 is 350 tonne and
the maximum demand of the customer 1 is 400 tonne units and
customer 2 is 500 tonne units. There are four options available
according to which the goods can flow from plant to the
warehouse and the cost involved into it.
OPTION 1:
The flow of goods from Plant 1 to warehouse 2 and customer 2
is 50 and 200 tonne units as shown in excel exhibit .Flow of
goods from Plant 2 to warehouse 1 and customer 1 is 100 and
200 tonne units and from Plant 3 to warehouse 2 and customer
1 is 150 and 200 tonne units. In case of warehouse 1 the
quantity passes to customer 2 is 100 tonne units and from
warehouse 2 quantity passes to customer 2 are 200 tonne
units. The total cost involved in flow of goods in case of option
1 is 12425.
OPTION 2:
The flow of goods from Plant 1 to warehouse 2 250 tonne units
as shown in excel exhibit .Flow of goods from Plant 2 to
warehouse 1 and customer 1 is 100 and 200 tonne units and
from Plant 3 to warehouse 1 and customer 1 is 150 and 200
tonne units. In case of warehouse 1 the quantity passes to
customer 2 is 250 tonne units and from warehouse 2 quantity
passes to customer 2 is 50 tonne units. From customer 1 to
customer 2 is 200 tonne units. The total cost involved in flow of
goods in case of option 2 is 10300.
OPTION 3:
The flow of goods from Plant 1 to Plant 2 and Plant 3 is 50 and
200 tonne units as shown in excel exhibit .Flow of goods from
Plant 2 to warehouse 1 and customer 1 is 250 and 200 tonne
units and from Plant 3 to warehouse 2 and customer 2 is 250

and 200 tonne units. In case of warehouse 1 the quantity
passes to customer 2 is 100 tonne units and customer 1 is 150
tonne units and from warehouse 2 quantity passes to customer
1 is 250 tonne units and from customer 1 to customer 2 is 200
tonne units. The total cost involved in flow of goods in case of
option 3 is 8725.
OPTION 4:
The flow of goods from Plant 1 to Plant 2 and Plant 3 is 50 and
200 tonne units as shown in excel exhibit .Flow of goods from
Plant 2 to warehouse 1 and customer 1 is 150 and 200 tonne
units and from Plant 3 to warehouse 2 and customer 2 is 250
and 200 tonne units. In case of warehouse 1 the quantity
passes to customer 1 and customer 2 is 150 and 100 tonne
units and from warehouse 2 quantity passes to customer 1 is
250 tonne units and from customer 1 to customer 2 is 200 units
respectively. The total cost involved in flow of goods in case of
option 4 is 8525.
OPTION 5:
The flow of goods from Plant 1 to Plant 2 and Plant 3 is 50 and
200 tonne units as shown in excel exhibit .Flow of goods from
Plant 2 to warehouse 1 and warehouse 2 and customer 1 is 50,
100 and 200 tonne units and from Plant 3 to warehouse1 and
warehouse 2 and customer 2 is 200,150 and 200 tonne units. In
case of warehouse 1 the quantity passes to customer 1 is 250
tonne units and from warehouse 2 quantity passes to customer
1 and customer 2 is 150 and 100 tonne units and from
customer 1 to customer 2 is 200 units respectively. The total
cost involved in flow of goods in case of option 5 is 8775.
Accordingly we can conclude that option 4 is better in relation
to cost.