From f587f2dd0fada29c9f933a88287cad99a1632139 Mon Sep 17 00:00:00 2001 From: pablo Date: Mon, 18 Apr 2022 11:57:35 +0200 Subject: [PATCH] Small changes to case 1. --- cases/case_1/case_1_description.md | 78 ++++++++++++++++-------------- 1 file changed, 41 insertions(+), 37 deletions(-) diff --git a/cases/case_1/case_1_description.md b/cases/case_1/case_1_description.md index 9d35f00..6890e49 100644 --- a/cases/case_1/case_1_description.md +++ b/cases/case_1/case_1_description.md @@ -53,27 +53,29 @@ view, they are usually just called "the clients". Whenever one of the clients needs raw beans, they arrange a transport truck that goes to the warehouse to pick up a certain amount of goods. Elisa's team fills up the truck with the requested goods, and then the clients take care of receiving that at their own -locations. +locations. Given the size and relevance of the Caserta warehouse, activity is +pretty much constant, with goods leaving the warehouse towards client locations +every day. The Caserta warehouse itself has only one way to source coffee beans to store in their warehouse: requesting them to the Beanie Limited central offices in Diemen, near Amsterdam. Whenever Elisa's team considers that more stock is -needed, they post a sourcing order to the central office for a certain amount +needed, they post a Purchase Order to the central office for a certain amount of beans. The central office arranges the goods and the delivery and, after a -few days, the goods reach Caserta and are stored. The central office tries to -ensure a lead time of 7 days (lead time is the time that passes between an -order being placed and the goods reaching their destination), but the reality -is they do what they can and this time is not always respected. +few days, the goods reach Caserta and are stored in the warehouse. The central +office tries to ensure a lead time of 7 days (lead time is the time that passes +between an order being placed and the goods reaching their destination), but +the reality is they do what they can and this time is not always respected. Stock is a necessary evil (it implies a lot of cost), but Elisa's warehouse -plays a key role in serving the clients in their region properly. Having too -little stock means the clients need to wait long times to get their goods, -which is risky for the business. On the other hand, having a lot of stock means -high warehouse costs and financial opportunity cost (if Beanie Limited has 1 -million € in coffee beans in a warehouse, that is 1 million € they can't invest -somewhere else to improve their business). Thus, Elisa needs the stock to be as -small as possible, while making sure she is not disappointing clients at the -same time. +needs it to serve the clients in their region properly. Having too little stock +means the clients need to wait long times to get their goods, which is risky +for the business. On the other hand, having a lot of stock means high warehouse +costs and financial opportunity cost (if Beanie Limited has 1 million € in +coffee beans in a warehouse, that is 1 million € they can't invest somewhere +else to improve their business). Thus, Elisa needs the stock to be as small as +possible, while making sure she is not disappointing clients at the same time +because of stockouts. Elisa is calling you because 2021 was a terrible year for the warehouse. The year was a chaotic one, and Elisa's team was not able to run operations @@ -82,12 +84,12 @@ that the warehouse stock was unnecessarily high at times, and that there were too many periods where the warehouse was out of stock and clients had to wait to get their goods. -Elisa thinks that the main reason for this is the lack of a clear policy for -when to order and how much to order from Diemen. Her team decides independently -when to do it, and Elisa has a feeling that they are not approaching these -decisions the right way. This means that sometimes they order when there is no -need to, sometimes they don't order when they should be, and that the amounts -being ordered might not always be the best ones. +Elisa thinks the main reason for this is the lack of a clear policy for when to +order and how much to order from Diemen. Her team decides independently when to +do it, and Elisa has a feeling that they are not approaching these decisions +the right way. This means that sometimes they order when there is no need to, +sometimes they don't order when they should, and that the amounts being ordered +might not always be the optimal ones. Here is where you come in. As simulation experts, Elisa expects from you that you can help design an ordering policy to fix these issues. Doing this implies @@ -107,7 +109,8 @@ SimiUPF will be mad at you... 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 Elisa, should give - her clear recommendations and should justify these recommendations. + her 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 @@ -122,21 +125,23 @@ SimiUPF will be mad at you... to serve clients. There is some amount leaving every day because the warehouse serves many small orders from small clients, so there is always some order being fulfilled. The amount is measured in kilograms, and - represents the total amount that left during that day. - - sourcing_events: this table shows the beans orders that Elisa's team + represents the total amount that left during that day. Individual orders + are not relevant for this case, so we only look at daily total figures. + - sourcing_events: this table shows the Purchase Orders that Elisa's team placed to Diemen. For each order, there are two dates: the date when Elisa's team placed the order, and the date where the beans actually - reached the Caserta warehouse. The amount is measured in kilograms. + reached the Caserta warehouse. The difference between those dates is the + real lead time of each order. The amount is measured in kilograms. - stock_state: this table shows the stock at the warehouse at the end of each date. As you can guess, the stock for a certain date is the stock of the previous day, plus the goods that reached Caserta coming from Diemen, minus the goods that left the warehouse to serve client orders. A negative stock is not a challenge to the laws of physics: it means clients are waiting for their requested beans. If one row shows -1.000, - it means that the warehouse is empty, and clients are awaiting for a - total amount of 1.000 kgs of beans. If next morning, a 1.000 kgs reach - Caserta from Diemen, those will be used immediately to satisfy those - waiting clients, and the warehouse stock will become 0. + it means that the warehouse is empty, and clients are awaiting a total + amount of 1.000 kgs of beans. If next morning, a 1.000 kgs reach Caserta + from Diemen, those will be used immediately to satisfy those awaiting + clients, and the warehouse stock will become 0. ## Notebook @@ -150,28 +155,27 @@ warehouse. The instructions on how to use the code are in the notebook itself. - Elisa wants you to measure the performance of the last year, providing quantitative metrics. She knows it was a bad year, but hasn't looked at the real data to summarize how bad it was. Remember that there is a - trade-off: - too much stock, is not desired, but running out of stock and making - clients wait is also negative. + trade-off: too much stock, is not desired, but running out of stock and + making clients wait is also negative. - Going one step further, Elisa wants to know: what was done wrong? - Level 2 - Elisa wants you to propose an ordering policy. This means, that you need to define a rule that, once each day, should answer the questions: should - be place an order to request material today? If yes, how much should we - order? + we place a Purchase Order to request beans from Diemen today? If yes, how + much should we order? - Use simulation to present metrics on what is the expected performance with the policy you are proposing. Remember, you need to convince Elisa that this is better than what happens today. - As a specific constraint, Elisa explains that she wants that the probability of a stockout to be at most of 5% on any given day. - - + - Level 3 - Right after you finished designing your policy for level 2, Elisa called with some news: she has just been informed by the management in Diemen that a new Minimum Order Quantity (MOQ) rule will begin soon. This rule means that, when the Caserta warehouse places an order to request - material from, the order should be of at least 500,000 kgs of beans, and - not less than that. + material from Diemen, the order should be of at least 500,000 kgs of + beans, and not less than that. - Elisa wants you to take this into account. Does it affect the policy you proposed for level 2? If so, you need to come up with a new one that adapts to this rule and compare it to the previous one. @@ -186,7 +190,7 @@ warehouse. The instructions on how to use the code are in the notebook itself. in exactly 15 days. - Elisa would love if you could take some additional time to study this proposal. What is better for Caserta? The current 7 days target - lead-time, with unstable deliveries? Or a fixed, 15-day lead time? + lead-time, with unstable delivery times? Or a fixed, 15-day lead time? - The MOQ rule of level 3 still applies.