Task 2

Which tool should you use to develop a recommendation to lower the costs and improve the shipping times for goods through the supply chain? Using the output of the analysis tool you selected, determine the best solution. Provide an explanation of why this is the best solution. Be sure to include the tool's output with a brief explanation of why you chose that tool.Task 2 Decision Analysis

Shuzworld currently has three production plants and three central warehouses for one of

As per the excel spreadsheet, this solution shows the most cost effective distribution for one month. The optimal monthly cost is $13,400. In order to achieve this cost, the Shanghai factory should send 1,500 units to Warehouse 2. The Shuzworld H factory should send 300 units to Warehouse 1 and 1,800 units to Warehouse 3. The Shuzworld F factory should send all 2,200 units to Warehouse 1. Several units will also need to be sent to a "dummy" destination. The Shanghai factory will send 1,300 units and Shuzworld H will send 200 units to a "dummy" factory. This occurs because the increase to 2,800 units creates more supply than there is demand. A "dummy" destination is created to equal out the supply and demand, but these units are never shipped. Since they are never shipped, they have no cost associated to them.

We want to increase our production in the Shanghai factory to 2,800 units. This is in anticipation of increasing demand. We do not currently have that increased demand, so the "dummy" destination will not hurt them us at this time. This projection will give us time to determine our next course of action, so we can meet demand in the future. We may have to allocate another warehouse for these 1,500 monthly units of women's shoes in the future.