Game 2 Strategy

Game 2 Strategy - Our Strategy When we began the new stage...

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Our Strategy When we began the new stage of the game we decided that we needed to make the following decisions: 1. What Regions should be supplied? a. We decided to look at the demand in each area assuming that we supplied them only with the factory and warehouse in Calopeia. The cost was our main factor in deciding if they could be supplied profitably from a factory and warehouse in Calopeia. We used the formula of i. Profit=Price-Cost ii. Cost=Production+Transportation+Holding Cost of Safety Stock+Transportation to consumer iii. Calopeia Profit=1450-1000-15-75-ignore holding cost-150= $210 1. Numbers used: a. 1450 Given Saling Price b. 1000 Variable Production Cost c. 15 Fixed production of $1500 spread over 100 drums d. 75 Truck transport in region 15,000/200 drums per truck e. Holding cost is minimal so not included f. 150 cost to mail a drum to customer in same region iv. Sorange,Tryan, Entworpe Profit=1450-1000-15-75-ignore holding cost- 200= $160 1. Numbers used: a. 200 cost to mail a drum to customer on same continent v. Fardo Profit=1450-1000-15-75-ignore holding cost-400= -$40 1. Numbers used: a. 400 cost to mail a drum to customer on different continent b. Given the option of only producing and warehousing in Calopeia we decided we would serve all locations but Fardo because of the negative expected profit
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2. What regions should have a Warehouse?
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Game 2 Strategy - Our Strategy When we began the new stage...

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