jacob industries simulation report 2014
DESCRIPTION
Always use proper forecasting techniques when planning expansion in factory capacity and anticipating demand.TRANSCRIPT
![Page 1: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/1.jpg)
SIMULATION REPORTJacob Industries
![Page 2: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/2.jpg)
![Page 3: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/3.jpg)
Team
0 100 200 300 400 500 600 700 800 900 10000
500
1000
1500
2000
2500
3000
3500
Cash Balance
Cash
![Page 4: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/4.jpg)
Too Much Factory Capacity
On day 859, a decision was taken to increase the current factory capacity from 20 barrels a day to
80.
Cost Savings $3MM
![Page 5: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/5.jpg)
Inefficient use of the Mailing Option
On day 856, a decision was taken to change the delivery option from truck to mail.
A total of 9600 barrels were mailed from day 859 t0 979.
Cost Savings $0.8MM
![Page 6: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/6.jpg)
High Levels of W.I.P Maintained
For the period 859 to 1004The reorder point increased to 400 on average.
Cost Savings $4.9MM.
![Page 7: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/7.jpg)
What To Do?
![Page 8: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/8.jpg)
Option 1
![Page 9: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/9.jpg)
Option 2
![Page 10: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/10.jpg)
ACTION PLAN
1. Shift System: on average 35 days.2. 7 day Moving Average Forecasting Technique.3. Demand more than 100bbls = Trucking4. Demand less than 100bbls = Mailing
![Page 11: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/11.jpg)
Where We Got To
0 200 400 600 800 1000 1200 1400 16000
500100015002000250030003500
Cash
Cash
![Page 12: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/12.jpg)
Closing Cash Position
On day 1460Jacob Industries Closing Cash balance
$2.95MM
![Page 13: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/13.jpg)
What about those Cost Savings?
![Page 14: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/14.jpg)
Post MortemIssue Issue Projected Cost Saving ($MM)
Too much factory capacity 3.0
Inefficient use of mailing option 0.8
High Levels of W.I.P 4.90
Foregone Interest 0.87
Total 8.7
Projected Closing Balance 12.52
![Page 15: Jacob Industries Simulation Report 2014](https://reader035.vdocuments.mx/reader035/viewer/2022070313/55490f74b4c90565458bd102/html5/thumbnails/15.jpg)
Questions