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Manufacturing company that demands frequent deliveries

A supplier provides parts to a manufacturing company that demands frequent deliveries. At the present time it takes six hours to make a round trip between the supplier’s warehouse and the customer, including loading, travel, and unloading time.
The lot size is 12 pallet loads on a truck, and the manufacturer uses 2 pallets per hour.
a) How many trucks are needed to ship the pallets to the manufacturer?
b) What is likely to happen if the truck breaks down?
c) How can the supplier ensure that the customer does not run out of parts even in the face of delivery problems or other uncertainties?
d) What will happen to the supplier if the manufacturer runs into trouble and shuts down for a period of six hours?

Sample Solution

The number of trucks needed to ship the pallets to the manufacturer is:

a) Number of trucks needed to ship the pallets to the manufacturer

The number of trucks needed to ship the pallets to the manufacturer is: number of trucks = demand rate / (lot size * round trip time) = 2 pallets/hour / (12 pallets/truck * 6 hours/truck) = 0.025 trucks/hour = 1 truck every 40 hours

b) Likely to happen if the truck breaks down

If the truck breaks down, then the manufacturer will not be able to receive any parts. This could lead to a production shutdown at the manufacturer, as they will not have the parts they need to make their products.

c) How can the supplier ensure that the customer does not run out of parts

The supplier can ensure that the customer does not run out of parts by:

Keeping a buffer stock of parts in the warehouse.
Having multiple trucks available so that they can still deliver parts if one truck breaks down.
Using a kanban system to control the flow of parts.

d) What will happen to the supplier if the manufacturer runs into trouble and shuts down for a period of six hours?

If the manufacturer runs into trouble and shuts down for a period of six hours, then the supplier will not be able to sell any parts to the manufacturer. This could lead to a loss of revenue for the supplier. Additional thoughts The supplier and the manufacturer should work together to develop a contingency plan in case of disruptions. This plan should include provisions for keeping a buffer stock of parts, having multiple trucks available, and using a kanban system. The supplier should also monitor the demand for parts from the manufacturer closely. If the demand for parts increases, then the supplier may need to increase the number of trucks they use or the size of their buffer stock. By working together, the supplier and the manufacturer can minimize the impact of disruptions and ensure that they continue to meet the needs of their customers.