DSM Manufacturing When Network Analysis Meets Business Reality Case Essay

Total Length: 1103 words ( 4 double-spaced pages)

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Conduct an initial scenario cost analysis that will determine the optimal location for the new contract manufacturer



Decision analysis can be utilized to ascertain a suggested decision alternative or an optimal decision strategy when a decision-maker is encountered with an indeterminate and risk-full configuration of forthcoming happenings. The objective of decision analysis is to pinpoint the best possible decision alternative or the optimal decision strategy provided information regarding the indeterminate events and the potential consequences or payoffs (Anderson et al., 2012). In delineation, scenario analysis is the practice of approximating the anticipated portfolio value subsequent to certain period. This takes into account the supposition of particular variations within the portfolio's securities values or major factors come about; for instance, a variation in the interest rate. Scenario assessment is frequently employed to approximate variations to a portfolio's value as a reaction to an negative occurrence, and might be utilized to study a theoretical worst-case scenario (Investopedia, 2016). The following is an initial cost analysis scenario that will determine the optimal location for the new contract manufacturer, taking into account the data and constraints provided.



DSM Manufacturing has contracted Phil and Jim to assess the supply chain and ascertain the most ideal and optimal location for a contract manufacturer. There are numerous constraints. To start with, 15% of the product volume would emanate from Asia, whereas the rest of it would emanate from Marshall town in Iowa, which is DSM Manufacturing's core location.

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Secondly, 10% of the product volume from Asia would have to be routed through quality control in Marshall town prior to being shipped to the contract packager. In turn, the contract packager would ship the product to one of the existing regional distribution centers for additional handling and shipping to the final consumer. For the time being, one of the project's sponsors sought to ascertain whether Marshall town, situated in region that was not densely populated, was in fact the optimal and ideal location (Harrington et al., 2010).



The data selected for the difference scenarios is as follows:



To: / From:



CA



GA



IA



NY



TX



MN



Total



IA



1.63



1.72



3.22



1.84



1.81



2.21



12.43



TX



1.13



1.16



1.11



1.22



1.67



1.1



7.39



TN



1.18



1.62



1.24



1.43



1.33

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References


Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, J. J. (2012). Quantitative methods for business. Cengage Learning.

Frankel, R. M. (2013). The definitive guide to supply chain best practices: comprehensive lessons and cases in effective SCM. Pearson Education.

Harrington, L. H., Boyson, S., & Corsi, T. (2010). X-SCM: The new science of X-treme supply chain management. Routledge.

Investopedia. (2016). Scenario Analysis. Retrieved from: http://www.investopedia.com/terms/s/scenario_analysis.asp

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"DSM Manufacturing When Network Analysis Meets Business Reality Case", 12 December 2016, Accessed.21 October. 2019,
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