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POM for Windows. Objectives. Background on Software Features of Software Present (2) Real-Life Problems Transportation Lot-Sizing Demonstrate Software’s Capabilities Have FUN While Learning!!!. Introduction to POM. Background Modules Handy features. Real-Life Problem #1:.
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Objectives • Background on Software • Features of Software • Present (2) Real-Life Problems • Transportation • Lot-Sizing • Demonstrate Software’s Capabilities • Have FUN While Learning!!!
Introduction to POM • Background • Modules • Handy features
Real-Life Problem #1: TRANSPORTATION
Definition: A transportation problem involves transporting items from sources with fixed supply to destinations with fixed demand at lowest cost.
Here’s the problem… • COMPANY wants to find the most cost effective way to transport their product from the suppliers to the retailers, based on a shipping rate of $0.03/mi. and a supply/demand based on the chart.
A few TERMS… • Source • Destination • Objective (min. or max.) • Vogel’s Approximation method
The PROCESS: • Step 1: Create Data Set • (#) Source • (#) Destination • Objective (min. or max.) • Step 2: Populate the Table • Rows = Sources • Columns = Destinations • Step 3: Solve • Click on the SOLVE button
What does this give us?? • Explain Results… • Transportation Shipments • Shipping Costs • Shipments List
Conclusions • By following the results of the DSS software, the COMPANY can MINIMIZE its total transportation expenses. • Profits will soar!! Profits
Real-Life Problem #2: LOT-SIZING
Definition: Given a set of demands in future periods, the goal is to place orders which meet these demands and minimize the sum of the costs of holding goods from period to period plus the (setup) costs of placing the orders.
Here’s the problem… • COMPANY wants to optimize its lot-size
Period Demand Holding Cost Setup Cost Stock-Out Cost Initial Inventory Lead Time Methods Wagner-Whitin(WW) Lot-for-Lot EOQ POQ Part-Period-Balancing User-defined A few TERMS…
The PROCESS: • Step 1: Create Data Set • (#) Period • Step 2: Populate the Table • 1st Row = Demand • 2nd Row = Values • Select Method • Step 3: Solve • Click on the SOLVE button
What does this give us?? • Explain Results… • Lot-Sizing Results
Conclusions • By optimizing our lot-size, we can eliminate backed-up inventory, therefore, saving the COMPANY money! SAVINGS
Overall Conclusion Useful Competative Advantage