Supply Chain Modelling and Decision Making SCM3002
- Subject Code :
SCM3002
SCMD:Assessment1
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 985 ha and 1,025 ha respectively. The farmer estimates the average wheat yield to be 2.5 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 |
|
|
Freightcost(tomovewheat fromfarmstomills,$/t) |
Farm1 |
$7.14 |
$6.76 |
$7.53 |
|
Farm2 |
$6.76 |
$7.14 |
$7.14 |
|
|
Labourcost(toharvestwheat,$/ha) |
Farm1 |
$29 |
$29 |
$29 |
|
Farm2 |
$30 |
$30 |
$30 |
|
|
Sellingprice(revenueearned,$/t) |
$469 |
$450 |
$475 |
|
|
Demands(t) |
1,750 |
1,900 |
1,875 |
|
The 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 time for the wheat to be sown.
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 $375.84/ha.
The farmer considers the labour cost for sowing wheat be constant. They plan to sow wheat between April and June. With appropriate timing in sowing, they can grow wheat to be ready for harvesting between September and November. To achieve this, in each farm, they will partition the farming area into three lots, and in each lot, wheat will be sown at different time.
The farmer is confident that all wheat will be sold and would like you to come up with thestrategic planof wheat distributionthat willmaximisetheprofit.Pleasefocusthediscussion onyour report inthefollowingareas:
- 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 considers installing on-site silos so that they can store wheat harvested in Sep and distribute it either Oct or Nov, how will this change the distribution plan and costs? It will cost the farmer $0.07/t to load wheat into silos, $0.07/t to maintain wheat in the silos for a month, and $0.07/t to unload wheat from
- Based on part 4, if a silo costs $300 to store one tonne of wheat, how much will it cost the farmer to install the silos?
Basedonthediscussion,youareexpectedtomakerecommendationsfromthesolutionsthat
you find. Please note that the service life of silos is about 35 years.
