Management Science – Article Example
Nu-kote’s Spreadsheet Linear Programming Models for Optimizing Transportation Nu-kote is a manufacturing company based inFranklin, Tennessee that specializes in ink jet, lasers and toner cartridge. Over the years, its main strategy has been to be the cheapest producer in the industry. Due to this point the company had to give up with ways on how to achieve its goal. This led to the development of the LP model. The main objectives at hand were to determine the least expensive way of transporting products from the source to the customers keeping in mind inventory holding and handling expenses: and also provide acceptable responsibility to customers (Vollmann 229).
To achieve the latter the company used the approach of Robinson et al. (2003), defining acceptable responsiveness as equivalent to each customer being served by a warehouse within 1000 mile radius. The development of the LP model took four vital steps which included studying the company’s facilities and collect data, analyzing the freight costs, designing and developing spreadsheets and finally solve the models different versions, evaluate the solutions and presentation. Due to the bulk of the LP model, the company had to buy a premium solver that was able to work out directly into excel which took approximately 25 minutes. In conclusion, the LP model has the company’s annual cost by almost $1 million and customer transit time by two days (Vollmann 114). Lastly, LP models are indispensable in that they facilitate and enhance customer service. This particular use of optimization modeling has been hugely beneficial to Nu-kote managers as it has catalyzed a new idea or a new school of thought for the Nu-kote managers (Vollmann 15).
Vollmann, T., W. Berry, C. Why bark.. Manufacturing Planning and Control, 4th ed. McGraw-Hill, Boston, MA. 2007, Print