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Facility Location Study for Williams Technologies

(Erik Wikstrom, Jeff Cate, 1996)

This section includes an overview of the transportation project we completed for Williams Technologies Incorporated. It provides brief descriptions of the problem, method of analysis, and results of the analysis.

Description of the Problem. Williams Technologies Incorporated (WTI), intends to increase customer satisfaction by decreasing time-to-market of its products, namely re-manufactured transmissions. WTI believes this goal can be accomplished by developing a more efficient shipping system, while minimizing the cost-to-market. This new system may be developed in-house or out sourced. Therefore, WTI needs an in-house solution that can be compared to those submitted by outside sources.

Method of Analysis. A transportation model that includes all primary markets, secondary markets, distribution centers, the production plant, and all combinations of connecting routes provides the basic tool used in the analysis. The demands and costs used in the construction of the model are based on projections from the prior year. More constraints and/or assumptions may be added as needed to fine tune the model. This model provides the shipping route and distribution center combination that yields the lowest total cost, while achieving WTI's objective. The model can be modified to reflect changes in market demands, warehouse costs, and shipping costs.

Results of the Analysis. The model indicates that a single distribution center that serves all markets should be located in Charlotte, NC. This is a surprising result, which reflects the high fixed cost associated with establishing a distribution center. The fixed cost was determined through a subjective method, which might not accurately reflect actual fixed cost. If better information about fixed cost is entered into the model, the outcome might be substantially different.

Richard S. Barr
Fri Feb 17 16:09:51 CST 2006