diff --git a/cases/case_2/case_2_description.md b/cases/case_2/case_2_description.md new file mode 100644 index 0000000..70afd5a --- /dev/null +++ b/cases/case_2/case_2_description.md @@ -0,0 +1,153 @@ +# Case 2: Optimizing network design to minimize costs + +After successfully finishing your first engagement with Beanie Limited, Elisa +has praised you enthusiastically in conversations with Charles Murray, Beanie +Limited's COO (Chief Operations Officer). Charles is responsible for the entire +manufacturing and supply chain organization of Beanie Limited in Europe and +reports directly to Beanie Limited's CEO. + +Given Charles role, he gets involved in larger, strategical and long-term +decisions when we compare with Elisa. One of the hot topics that is currently +in Charles mind is the next plan for coffee beans reception in European docks. +Charles' office has reached out to you to prepare a report to assist in this +highly important decision by using optimisation techniques. + +As you are probably aware, coffee beans are not grown in Europe. World +production is divided across South/Central America, Africa and South East Asia. +Beanie Limited purchases all of its coffee beans from different providers in +America, mainly in Brasil and Colombia (these two countries account for almost +40% of the world production). Beanie Limited procurement teams execute +purchases with local providers at hose locations and then the coffee beans are +shipped in container cargo ships to European docks. + +Docks are a natural bottleneck in supply chains. Dock capacity in europe is +limited, and both storage and handling (the activities related with loading and +unloading goods on ships) in docks are expensive services. Charles thinks that +Beanie Limited has not paid enough attention to this part of the supply chain +since covid-19 radically changed the landscape (total costs for trans-oceanic +freight of standard containers have seen five-fold increases during the +pandemic) and wants to evaluate if the current way of working can be improved. + +Currently, Beanie Limited takes a very simple approach: all the beans purchased +in America reach Europe on the Rotterdam docks (the largest in Europe). The +Amsterdam docks are used sparingly whenever there are high activity periods or +the Rotterdam docks are under a lot of stress. Charles believes that there is +an opportunity to reduce costs and make their supply chain more resilient if +the company distributes their reception points across more docks in Europe. + +Charles' team has initiated conversations with 8 different docks throughout +Europe: + +- Rotterdam +- Antwerp +- Hamburg +- Amsterdam +- Marseille +- Algeciras +- Valencia +- Genoa + +In the upcoming months, Charles team must sign contracts with some of these +docks to ensure incoming capacity for the coffee beans coming from America. +This means they will agree with the docks on the expected handled volumes and +thus they must decide with which docks they want to work and how much volume +they will assign to each. The team has collected the details provided by the +docks' companies for you to study. This information includes the capacity the +docks could commit for Beanie Limited, as well as the prices for handling +Beanie Limited's 40 feet containers through the dock. + +Charles wants you to use your optimization skills to assess the different +options and recommend the best decisions for the company regarding how much +volume to put through each dock. He hopes you can come up with a plan where +Beanie Limited ensures it will have enough capacity, while at the same time +costs are as low as possible. + +## Detailed task definition + +- Below you will find four levels of questions. Levels 1 to 3 are compulsory. + Level 4 is optional. +- You need to write a report document where you answer the questions of the + different levels. This report should be directed towards Charles, should give + him clear recommendations and should justify these recommendations. It's + important for you to reflect your methodology to back your proposals. +- Each level is worth 2 points out of a total of 10. The 2 missing points will + grade the clarity and structure of your report and code. +- You need to use a Python notebook to solve all levels. A helper notebook is + provided. Please attach a notebook that shows your + solution/proposal/analysis. +- Include your team number, names and student IDs in all your deliverables. + +## Data + +A few facts: + +- Charles' team estimates that Beanie Limited will need to receive 1,500,000 + metric tons of coffee beans in European docks during next year. +- The category being negotiated is 40 feet containers. 40 feet containers have + a a capacity of 66 cubic meters. +- One cubic meter of coffee beans weights approximately 450 kgrs. + +Charles' team has shared with you a table with the prices proposed by the +different docks for 40ft containers. You can also find the maximum capacity +that the dock is willing to provide to Beanie Limited (the capacity is +described as a count of 40ft containers). + +## Levels + +Level 1 + +Explore historical data and current proposals. Do you think there is a chance +to reduce costs? Why? + +Level 2 + +With the price and capacity data provided for each dock, Charles would like you +to find out what is the optimal distribution across the different options for +next year. He is expecting you to provide the exact numbers, as well as the +expected costs that would result from your proposal. + +Level 3 + +As it tends to be in these projects, sometimes new information appears in the +middle of the project. Charles' team has reached out to let you know that they +have some additional details from the different ports. The following docks have +a sign-up fee. This means that, if Beanie Limited wants to do any business with +them at all, they need to pay this fee. This fee is only paid once and is +independent of the container volume that goes through the dock. + +- Algeciras: 800,000€ +- Marseille: 500,000€ +- Antwerp: 1,000,000€ + +Charles wants you to reassess the situation with the new data and provide the +adequate solution with the new options. He also would like to understand how +these changes impact the solution you provided for level 2 and the overall +results for Beanie Limited. + +Level 4 + +After presenting your results from level 3, Charles is very happy with your +work, although there is something bothering him. Even though your proposal +sounds reasonable, he is concerned that splitting the operations between too +many docks might make European land logistics operations too complex and end up +causing higher costs in their truck transportation that cancel the potential +savings that cana be obtained in docks operations. + +Charles doesn't have numbers currently, so there is no way to tackle this +properly. To have the necessary information to think about this in the future, +he would like you to repeat your analysis with a new condition in place: to +only use a maximum of 3 docks in your proposal. Charles wants to know what +would be the optimal decision while restricting the used docks to that number. + +Finally, to spice things up, one of the analysts in Charles' team also calls +you to inform that the management from the Rotterdam docks has warned Beanie +Limited that they have a new minimum volume policy in place. They will only +make business with Beanie Limited if they commit to handle, at least, 30000 +thousand containers through Rotterdam. + + + + + + +