Changes to case 2.
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@ -7,17 +7,17 @@ manufacturing and supply chain organization of Beanie Limited in Europe and
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reports directly to Beanie Limited's CEO.
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reports directly to Beanie Limited's CEO.
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Given Charles role, he gets involved in larger, strategical and long-term
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Given Charles role, he gets involved in larger, strategical and long-term
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decisions when we compare with Elisa. One of the hot topics that is currently
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decisions when we compare with Elisa's domain. One of the hot topics that is
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in Charles mind is the next plan for coffee beans reception in European docks.
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currently in Charles mind is the next plan for coffee beans reception in
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Charles' office has reached out to you to prepare a report to assist in this
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European docks. Charles' office has reached out to you to prepare a report to
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highly important decision by using optimisation techniques.
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assist in this highly important decision by using optimisation techniques.
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As you are probably aware, coffee beans are not grown in Europe. World
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As you are probably aware of, coffee beans are not grown in Europe. World
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production is divided across South/Central America, Africa and South East Asia.
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production is divided across South/Central America, Africa and South East Asia.
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Beanie Limited purchases all of its coffee beans from different providers in
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Beanie Limited purchases all of its coffee beans from different providers in
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America, mainly in Brasil and Colombia (these two countries account for almost
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America, mainly in Brasil and Colombia (these two countries account for almost
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40% of the world production). Beanie Limited procurement teams execute
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40% of the world production). Beanie Limited procurement teams execute
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purchases with local providers at hose locations and then the coffee beans are
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purchases with local providers at those locations and then the coffee beans are
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shipped in container cargo ships to European docks.
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shipped in container cargo ships to European docks.
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Docks are a natural bottleneck in supply chains. Dock capacity in europe is
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Docks are a natural bottleneck in supply chains. Dock capacity in europe is
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@ -47,7 +47,7 @@ Europe:
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- Valencia
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- Valencia
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- Genoa
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- Genoa
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In the upcoming months, Charles team must sign contracts with some of these
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In the upcoming months, Charles' team must sign contracts with some of these
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docks to ensure incoming capacity for the coffee beans coming from America.
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docks to ensure incoming capacity for the coffee beans coming from America.
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This means they will agree with the docks on the expected handled volumes and
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This means they will agree with the docks on the expected handled volumes and
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thus they must decide with which docks they want to work and how much volume
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thus they must decide with which docks they want to work and how much volume
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@ -75,6 +75,9 @@ costs are as low as possible.
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- You need to use a Python notebook to solve all levels. A helper notebook is
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- You need to use a Python notebook to solve all levels. A helper notebook is
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provided. Please attach a notebook that shows your
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provided. Please attach a notebook that shows your
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solution/proposal/analysis.
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solution/proposal/analysis.
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- For the areas of the report where you have built an optimization model,
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please provide a formal definition of the problem in mathematical terms. This
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sould include the target function, decision variables and constraints.
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- Include your team number, names and student IDs in all your deliverables.
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- Include your team number, names and student IDs in all your deliverables.
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## Data
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## Data
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@ -84,70 +87,106 @@ A few facts:
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- Charles' team estimates that Beanie Limited will need to receive 1,500,000
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- Charles' team estimates that Beanie Limited will need to receive 1,500,000
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metric tons of coffee beans in European docks during next year.
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metric tons of coffee beans in European docks during next year.
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- The category being negotiated is 40 feet containers. 40 feet containers have
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- The category being negotiated is 40 feet containers. 40 feet containers have
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a a capacity of 66 cubic meters.
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a capacity of 66 cubic meters.
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- One cubic meter of coffee beans weights approximately 450 kgrs.
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- One cubic meter of coffee beans weights approximately 450 kgrs.
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Charles' team has shared with you a table with the prices proposed by the
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Charles' team has shared with you a table (prices_and_capacities.csv) with the
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different docks for 40ft containers. You can also find the maximum capacity
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next year's prices proposed by the different docks for 40ft containers. You can
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that the dock is willing to provide to Beanie Limited (the capacity is
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also find the maximum capacity that the dock is willing to provide to Beanie
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described as a count of 40ft containers).
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Limited (the capacity is described as a count of 40ft containers).
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## Notebook
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A notebook with some helping code has been provided. The code contains examples
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on how to use `pulp`, a python package for modeling and solving optimization
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problems. You can use it to get familiar with how to solve linear, integer and
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mixed programming problems.
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## Levels
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## Levels
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Level 1
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### Level 1
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Examine the data provided below and current proposals data. Do you think there
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Examine the data provided below and current proposals data. Do you think there
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is a chance to reduce costs? Why?
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is a chance to reduce costs? Why? And will next year's total cost lower?
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You can assume that last year, around 80% of Beanie Limited's containers
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You can assume that last year, around 80% of Beanie Limited's containers
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entered through Rotterdam and the remaining 20% through Amsterdam. Total volume
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entered through Rotterdam and the remaining 20% through Amsterdam. Total volume
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was around 34000 40ft containers.
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was around 24000 40ft containers. Although they don't have more granular
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numbers at hand, Charles mentioned that they had a total expense of 13,700,00€
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on docks fees.
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Level 2
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### Level 2
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With the price and capacity data provided for each dock, Charles would like you
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With the price and capacity data provided for each dock, Charles would like you
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to find out what is the optimal distribution across the different options for
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to find out what is the optimal distribution across the different options for
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next year. He is expecting you to provide the exact numbers, as well as the
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next year. He is expecting you to provide the exact numbers, as well as the
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expected costs that would result from your proposal.
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expected costs that would result from your proposal.
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Level 3
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### Level 3
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As it tends to be in these projects, sometimes new information appears in the
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As it tends to be in these projects, sometimes new information appears in the
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middle of the project. Charles' team has reached out to let you know that they
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middle of the project. Charles' team has reached out to let you know that they
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have some additional details from the different ports. The following docks have
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have some additional details from the different ports.
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a sign-up fee. This means that, if Beanie Limited wants to do any business with
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them at all, they need to pay this fee. This fee is only paid once and is
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The following docks have a sign-up fee. This means that, if Beanie Limited
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independent of the container volume that goes through the dock.
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wants to do any business with them at all, they need to pay this fee. This fee
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is only paid once and is independent of the container volume that goes through
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the dock.
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- Algeciras: 800,000€
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- Algeciras: 800,000€
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- Marseille: 500,000€
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- Marseille: 500,000€
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- Antwerp: 1,000,000€
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- Antwerp: 1,000,000€
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Also, after presenting your initial results from level 2, Charles is very happy
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with your work, although there is something bothering him. Even though your
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proposal sounds reasonable, he is concerned that splitting the operations
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between too many docks might make land logistics operations too complex and end
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up causing higher costs in their truck transportation that cancel the potential
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savings that could be obtained in docks operations.
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Charles doesn't have numbers currently, so there is no way to tackle this
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properly in an empirical way. To have the necessary information to think about
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this in the future, he would like you to repeat your analysis with a new
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condition in place: to only use a maximum of 3 docks in your proposal. Charles
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wants to know what would be the optimal decision while restricting the used
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docks to that number.
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Charles wants you to reassess the situation with the new data and provide the
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Charles wants you to reassess the situation with the new data and provide the
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adequate solution with the new options. He also would like to understand how
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adequate solution with the new options. He also would like to understand how
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these changes impact the solution you provided for level 2 and the overall
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these changes impact the solution you provided for level 2 and the overall
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results for Beanie Limited.
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results for Beanie Limited.
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Level 4
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### Level 4
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After presenting your results from level 3, Charles is very happy with your
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Now that it seemed you finally had a proper proposal in place, Charles is
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work, although there is something bothering him. Even though your proposal
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calling again with more concerns and asking you to go the extra mile with a
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sounds reasonable, he is concerned that splitting the operations between too
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final assessment.
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many docks might make European land logistics operations too complex and end up
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causing higher costs in their truck transportation that cancel the potential
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savings that cana be obtained in docks operations.
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Charles doesn't have numbers currently, so there is no way to tackle this
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Apparently, some rumours have reached Charles ears. It seems that some new
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properly. To have the necessary information to think about this in the future,
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regulations in Spain might affect taxes related to dock activities. Charles
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he would like you to repeat your analysis with a new condition in place: to
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believes this could have an impact on the prices in Valencia and Algeciras,
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only use a maximum of 3 docks in your proposal. Charles wants to know what
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putting pressure on them to increase their prices because additional taxes
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would be the optimal decision while restricting the used docks to that number.
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would increase their own costs. The issue is: Charles doesn't know for sure
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what will happen. His expert opinion is that the following is possible:
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Finally, to spice things up, one of the analysts in Charles' team also calls
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- For Valencia, Charles thinks the price can end up somewhere between today's
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you to inform that the management from the Rotterdam docks has warned Beanie
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price (310€/40ft) and 390€/40ft. He says the probability of any price is in
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Limited that they have a new minimum volume policy in place. They will only
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that range is equal.
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make business with Beanie Limited if they commit to handle, at least, 30000
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- For Algeciras, Charles thinks the price can end up somewhere between today's
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thousand containers through Rotterdam.
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price (280€/40ft) and 330€/40ft. Again, he says the probability of any price
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is in that range is equal.
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Charles heard you did a great job by using simulation techniques with Elisa in
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your previous project. Charles' can't request you to do any simulation work as
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part of the current engagement, because that would be out of the scoped that
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was agreed upon. But nevertheless, he would appreciate if you could explain to
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him how would you use simulation to make the decision with these new
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uncertainty in place. What would be your methodology? What kind of results
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could you provide to him?
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With that information, he might decide to spend some more money with Simiupf to
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pursue that stream of work. And that would definetely make your bosses very
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happy!
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