Fireside tire company case study

Grid Technique Analysis for Fireside Tire Co.

PART A

Grid Coordinates

Calculations

Sources/Markets

Rate/CWT-mile (a)

CWT (b)

Horizontal

Vertical

A*B*Horizontal

A*B*Vertical

Toledo (s1)

2.2

15000

1360

1160

44,880,000

38,280,000

Macomb (s2)

2.43

5000

980

1070

11,907,000

13,000,500

Allentown (s3)

2.52

11000

1840

1150

51,004,800

31,878,000

Totals:

31000

107,791,800

83,158,500

Chattanooga (m1)

7

2700

1350

650

25,515,000

12,285,000

Atlanta (m2)

7

3500

1400

600

34,300,000

14,700,000

Tampa (m3)

7

4300

1570

220

47,257,000

6,622,000

Birmingham (m4)

7

2800

1260

580

24,696,000

11,368,000

Miami (m5)

7

5300

1740

90

64,554,000

3,339,000

Jacksonville (m6)

7

5100

1600

450

57,120,000

16,065,000

Columbia (m7)

7

2200

1600

650

24,640,000

10,010,000

Charlotte (m8)

7

2900

1590

740

32,277,000

15,022,000

Raleigh/Durham (m9)

7

2200

1700

800

26,180,000

12,320,000

Totals:

31000

336,539,000

101,731,000

Coordinates:

Horizontal

Vertical

Numerator

107,791,800

83,158,500

+

336,539,000

101,731,000

444,330,800

184,889,500

Denominator

72870

72870

+

217000

217000

289870

289870

Grid Location:

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Some additional "Tips" to note;

1. Use Excel to complete the table and calculations! Show the details behind the results.

2. Familiarize yourself with the "Example of a Heuristic Modeling Approach: The Grid Technique" described starting on pg 542.

3. Note the meaning of the "Lower" and "Upper-Case" variables denoted on pg544. Lower Case = Raw materials, Upper-Case = Finished Goods.

4. Study Table 12-2 to verify the Grid Center justifies Atlanta; does it or not, verify how close the number comes to the locations specified on pg 558.

5. Given the state of freight costs and different modes available, does it make sense for the business, what would you recommend.

6. Complete Item #1 only!