BioPharma Case Study

Over the five year period, the net movement has not been a disaster, and recognition of business cycles would suggest that it would be sis to retain capacity and capabilities throughout the entire supply chain so that production can be diverted as currencies move against each other. 3. Is there any plant for which it may be worth adding a million kilograms of additional capacity at a fixed cost of $3 million per year? It doesn’t appear this improves the solution shown in question 1.

The plants that are at capacity in part 1 are Brazil, India, Mexico, and the U. S.

; adding a million kilograms of capacity to those plants does not result in a lower overall cost for the entire supply chain. 4. How are your recommendations affected by the reduction of duties? A reduction in duties to 0% across the board results in the following costs: $38. 25 $1 ,325. 40 $0. 00 Total Tariffs (millions) The solution matrix is far less sparse; virtually every market receives imports from every other market with the exception of Mexico and Asia without Japan.

Production increases in Germany and Japan at the expense of India, Mexico, and the U. S. 1. 20 2. 28 0. 62 0.

00 4. 90 1. 52 2. 90 0. 95 2.

98 1. 12 2. 50 0. 55 2. 58 0. 53 1 .

91 0. 25 1. 99 0. 83 1. 48 3.

65 2. 46 1. 66 3. 03 2. 06 1. 26 2.

63 1. 47 0. 67 2. 04 18. 00 21 .

67 16. 87 9. 93 5. The analysis has assumed that each plant has allow percent yield (percent output differences across plants? To adjust for yields less than 100%, the capacity of each plant could be adjusted down by the loss percentage.

Another approach would be to leave capacity as stated but adjust the amount shipped down by the scrap percentage. 6.

What other factors should be accounted for when making your recommendations? This global supply chain is exposed to a variety of risks as enumerated below. Supply chain decisions should be made after careful assessment of the likelihood of these vents and the effectiveness of possible mitigation plans.

Disruptions – disasters, war, terrorism, labor disputes Delays – inflexibility or poor yield of supply, insufficient supply Systems – IS breakdown, system integration issues Forecast – inaccurate forecasting Intellectual property – vertical integration and global sourcing Procurement – exchange rate movement, industry-wide capacity issues Receivables – number and financial strength of customers Inventory – rate of obsolescence, holding costs, uncertainty of demand Capacity – cost and flexibility of capacity