SCMD: Assessment 1 SCMD301
- Subject Code :
SCMD301
- University :
University of Queensland Exam Question Bank is not sponsored or endorsed by this college or university.
- Country :
Australia
SCMD: Assessment 1
A farmer who owns two farms is planning wheat distribution from the farms to wheat mills after harvesting in SeptemberNovember. The areas of the farms are 970 ha and 980 ha respectively. The farmer estimates the average wheat yield to be 2.4 t/ha. Due to the dynamics in supply chains, the freight cost (i.e. for moving wheat from farms to wheat mills) keeps changing from month to month as well as the labour costs (i.e. for harvesting wheat), wheat selling prices, and demands:
|
Month |
|||
Activity |
Sep |
Oct |
Nov |
|
Freight cost (to move wheat from farms to mills, $/t) |
Farm 1 |
$6.88 |
$6.50 |
$7.27 |
Farm 2 |
$6.50 |
$6.88 |
$6.88 |
|
Labour cost (to harvest wheat, $/ha) |
Farm 1 |
$25 |
$26 |
$27 |
Farm 2 |
$25 |
$26 |
$28 |
|
Selling price (revenue earned, $/t) |
$370 |
$365 |
$375 |
|
Demands (t) |
1,700 |
2,000 |
1,800 |
|
This distribution plan will be crucial for the farmer. Due to the machinery constraints, the maximum harvesting rate each month is 900 t/farm. As a result, the farmer needs to know the amount of wheat to be distributed to the mills so that they can plan the areas of the farms and the types of the wheat to be sown.
In addition, the farmer is considering whether the wheat should be distributed to the mills in the same month of the harvest, or it should be kept in the on-site silos. If it is the latter, the farmer can decide which month and which farm the wheat should be loaded into, and unloaded from, the silos and shipped to the mills. However, the farmer can load wheat into the silos only in September. In addition, the wheat harvested at one farm can only be loaded into the silos located in the same farm. Due to cost constraints, the farmer cannot transport the wheat harvested in one farm into the silos located in another farm. To load wheat into the silos, the farmer must pay for auger and labour at the rate of $0.07/t. Unloading the wheat from the silos incurs the same amount of cost as the loading. In addition, the farmer must pay for maintenance while storing wheat in the silos at the rate of $0.07/t/month:
The farmer must also pay for their farming operations to sow and grow wheat. Although there are many costs involved in these operations, the farmer chooses to ignore those and focuses on the main components including labour, seed, fertiliser, chemicals, and insurance, which are a total of $331/ha.
The labour cost for sowing wheat is constant since the farmer plan to do this in April. With appropriate types of wheat, they can grow wheat to be ready for harvesting across SeptemberNovember. To achieve this, in each farm, they will partition the farming area into three lots, and each lot will grow each type of wheat that has a different grow rate.
The farmer is confident that all wheat will be sold and would like you to come up with the strategic plan of wheat distribution that will maximise the profit. Please focus the discussion in your report in the following areas:
- Profit, revenue, and breakdown costs
- Wheat distribution plan
- Farm partition plan (i.e. The farmer can expect when wheat can be harvested. For example, if September requires 650 t of wheat, they can partition 250 ha of the farm area for that month harvest)
- If the farmer needs to replace their old silos with new ones. Based on your solution, how many silos in each farm should be replaced, given that it will cost $5,000 per one 40t silo?
- Any additional improvement that is worth considering
