ShipSmart Lecture 2000 04 17

ShipSmartTM:The Model and the Computer Science: 

ShipSmartTM: The Model and the Computer Science Jonathan Sheffi University of Maryland College Park April 17, 2000

Outline: 

Outline The EOQ Model Reliability and Safety Stock Internal Structure of ShipSmart ShipSmart™ Example Object-Oriented Programming

Lot Size Inventory: 

Tradeoff: Production Batch vs. Inventory similar to Tradeoff: Shipment Size vs. Inventory Lot Size Inventory

Economic Order Quantity Model: 

A simple business: • Order fixed quantity of goods at fixed intervals • Sell at constant rate Economic Order Quantity Model

A Single Receiving Cycle: 

A Single Receiving Cycle

A Single Receiving Cycle: 

A Single Receiving Cycle

A Single Receiving Cycle: 

X A Single Receiving Cycle

A Single Receiving Cycle: 

X A Single Receiving Cycle

A Single Receiving Cycle: 

X Y A Single Receiving Cycle

Tradeoffs:: 

Tradeoffs: In addition:

Inventory Costs: 

Inventory Carrying Costs/Unit In-Transit Inventory Shipment Size Inventory Costs

Slide12: 

Shipment Size LTL Rate Actual rate curve Formula rate curve Transportation Costs

Slide13: 

Basic Tradeoffs ($/item) COSTS Shipment Size (items/shipment)

Slide14: 

Basic Tradeoffs Transportation costs ($/item) COSTS Shipment Size (items/shipment)

Slide15: 

Basic Tradeoffs Transportation costs Cycle inventory costs ($/item) COSTS Shipment Size (items/shipment)

Slide16: 

Basic Tradeoffs In-Transit Inventory Transportation costs ($/item) COSTS Shipment Size (items/shipment) Cycle inventory costs

Slide17: 

Basic Tradeoffs In-Transit Inventory Transportation costs Total inventory costs ($/item) COSTS Shipment Size (items/shipment) Cycle inventory costs

Slide18: 

Basic Tradeoffs In-Transit Inventory Total logistics costs Transportation costs Total inventory costs ($/item) COSTS Shipment Size (items/shipment) Cycle inventory costs

Slide19: 

Basic Tradeoffs In-Transit Inventory Total logistics costs Transportation costs Total inventory costs Opt. size ($/item) COSTS Shipment Size (items/shipment) Cycle inventory costs

Slide20: 

Basic Tradeoffs In-Transit Inventory Total logistics costs Transportation costs Total inventory costs Opt. size ($/item) COSTS Shipment Size (items/shipment) Least cost Cycle inventory costs

Slide21: 

Total Logistics Cost Safety Stock Costs In Transit Inventory Costs Transportation Costs Cycle Inventory Costs Other Costs Elements of Total Logistics Costs

Slide22: 

Analytical Expressions

Transit Times: 

Transit Times

Effect of Shipment Delay: 

Effect of Shipment Delay Regular on-time delivery

Effect of Shipment Delay: 

Inventory Time Delay One delivery delayed Effect of Shipment Delay

Effect of Shipment Delay: 

Inventory Time Delay Delivery pattern with a single delay Effect of Shipment Delay

Effect of Shipment Delay: 

Inventory Time Delay Erratic delivery pattern Effect of Shipment Delay

Effect of Safety Stock: 

Effect of Safety Stock Inventory Time Safety stock level

Effect of Safety Stock: 

Inventory Time Avoiding stock-out Effect of Safety Stock

Slide30: 

Transit Time Probability Transit Time Density Function

Slide31: 

Transit Time Probability Average Time Transit Time Density Function

Slide32: 

Transit Time Probability 95 Percentile Average Time Transit Time Density Function

Slide33: 

Transit Time Probability 95 Percentile Average Time Safety Time Transit Time Density Function

Slide34: 

Transit Time Probability 95 Percentile Average Time Safety Time Safety Stock for 95% Fill Rate = (Safety Time) x (Sales Rate) Transit Time Density Function

The Internal Structure: 

The Internal Structure Calculations are performed for each option separately In case there is one segment: Optimal shipment size is calculated using the EOQ formula Takes into account minimum frequency and storage capacity Calculates all other output values

The Internal Structure: 

The Internal Structure For multiple segments: Rank vehicle capacities Find how many vehicles are needed for each segment Loop over the second largest, third largest, etc. Use optimal solution to calculate all output values (including the segment solutions)

ShipSmart Example : 

ShipSmart Example

Tactics for the Rail Operator: 

Tactics for the Rail Operator Reduce shipment price Tighten delivery time Tighten reliability Compete for lower valued commodities Compete for commodities which ship in high volume

Procedural vs. OOP: 

Procedural vs. OOP Procedural programming: Organize system around procedures that operate on data (do-something <data> <arg> ...) (do-another-thing <data>) Object-oriented programming: Organize system around objects that receive messages (<object> 'do-something <arg>) (<object> 'do-another-thing) An object encapsulates data and operations

Advantages of OOP: 

Advantages of OOP Simplicity: software objects model real world objects, so the complexity is reduced and the program structure is very clear Modularity: each object forms a separate entity whose internal workings are decoupled from other parts of the system Modifiability: it is easy to make minor changes in the data representation or the procedures in an OO program. Changes in the behavior of an object do not affect any other part of a program, since the only public interface that the external world has to an object is through messages Extensibility: adding new features or responding to changing operating environments can be solved by introducing a few new objects and modifying some existing ones Maintainability: objects can be maintained separately, making locating and fixing problems easier Reusability: objects can be reused in different programs

Elements of OOP: 

Elements of OOP Class: specifies the common behavior of entities Instance: A particular object or entity of a given class

Space War Class Diagram: 

Space War Class Diagram

Space War Class Diagram: 

Space War Class Diagram Ships and torpedoes have some behavior that is the same – is there are way to capture this commonality?

Space war game with Inheritance: 

Space war game with Inheritance SHIP class is a specialization or sub-class of the MOBILE-THING class SHIP is-a MOBILE-THING SHIP inherits the state and behavior of MOBILE-THING MOBILE-THING class is a super-class of the SHIP and TORPEDO classes

Any Questions?: 

Any Questions? ? ? ? ? ? ? Jon Sheffi jsheffi@mit.edu