1. SUPPLY CHAIN GAME
ROUND 1 REPORT
SUBMITTED BY
TEAM: knights
NAME MATRIC NO
1. ELANGOVAN VIVEKANANDHAN G0803275J
2. RATHINASAMY SILAMBARASAN G0803508J
3. SANKARANARAYANAN TYAGGARAJAN G0900725E
4. SENJIVEL SENTHILKUMARAN G0900779E

2. 1. INTRODUCTION:
The Supply Chain Game revolves around four main concepts depending on demand and time as
listed,
 Order Point
 Quantity
 Mode of transportation
 Factory capacity
In the course of the game we “Knights” had secured 12th position. As the game began on the 730th day
the order point was 300 and quantity was 150.We used Order Batching concept to fulfil the customer
demands, to maintain minimum inventory and make the transport cost reasonable.
Strategy graph of the game:
Inventory management is the vital key for managing the supply chain. So it was evident to sustain the
inventory level to be high when the demand was high because of the uncertainty in customer’s
demand.

3. Strategy Description
Step 1: At the start of the 730th day, ROP was 300 and Qty was 150 and as two days went we
increased the quantity to 190 by calculating the demand for forthcoming 75 days, which were 17 per
day.
(17 * 11 = 187 ≈ 190)
Step 2: Since the nature of the demand is to increase day by day, to fulfil the future demands, we
increased the capacity to 50 from existing 20 per day on the 738th day so that the demand can be met
from the 828th day.
Step 3: Transportation cost per trip using the truck is $15000 irrespective of the quantity. So to utilise
the truck capacity fully and in order to reduce the transportation cost we increased the quantity to 200
on 742nd day
Step 4: Forecasting the demand for forthcoming 50 days and considering the safety stock of 50 days
average demand was calculated as 16 Numbers per day and ROP as 375. The Safety stock had been
calculated using the formula,
Safety Stock = A * σ * √ (Lead time) = 100
σ – Standard deviation from previous year data = 14.699
A – Service level Constant for 95 %, 1.65.
Lead time = 17 days.
ROP = Safety stock + LT * Average demand
Forecasted value for 75 days on 743rd day, ROP = 100 + 17 * 22.3 = 480 numbers
Forecasted value for 90 days on 825th day, ROP = SS + 11 * 59.6
Owing to the increase in factory capacity to 50, lead time decreased to 11.
A was assumed to be 0.8 for 70 % Service level.
Safety stock = √11 * 20 * 0.9 = 60
ROP = 60 + 11*59.6 = 715.
Step 5:
Since the transportation time for truck was literally more than that for the mail, on the 826 th day we
changed the mode of transportation from truck to mail in order to meet the demands and to avoid the
demand losses.
After 7 days when the capacity increased to 50 per day we switched back to truck to reduce the
transportation cost.
On 843rd day the demand losses were observed to be more so to avoid the same we replaced the truck
by mail again.

4. Step 6: The ROP was calculated as 335 on the 851st day neglecting the safety stock since there will
not be any breakdowns in factory or truck. The ordering quantity was decreased to 50 on the 872 nd day
taking into account the transportation mode and to reduce the pipe line inventory. After 4 days the
quantity was again increased to 200 to avoid the setup cost of $1500 per setup.
Step 7: The demand started decreasing in the forthcoming days so we switched back to truck.
Similarly we calculated Average demand, standard deviation, Safety stock, and ROP with the data of
last two years and the values are tabulated as follows
Day Action Taken ROP
1015 ROP ↓ 120
1023 ROP ↑ 300
1052 ROP ↓ 130
1079 ROP ↑ 200
1085 ROP ↑ 300
1111 ROP ↑ 500
1123 ROP ↑ 1000
1153 ROP ↑ 1200
1160 ROP ↑ 1500
1174 ROP ↑ 2000
1329 ROP ↓ 600
1368 ROP ↓ 200
1373 ROP ↑ 600
1379 ROP ↓ 400
1410 ROP ↓ 100
Step 8: The Inventory was 300 and pipeline inventory was found to be 200. Demand for forthcoming
50 days was 550 so we kept order quantity as 50. On 1430th day we calculated the demand for the last
30 days and the average demand was determined as 11 per day but my inventory was only 156
numbers so increased the ordered quantity to 100.
3. WHAT WE LOOSED:
Even though the year round averages of first two years are 39.76 and 38.62 respectively, we
increased the factory capacity to 50 per day to meet the third year peak demand as the inventory is not
able to maintain with the capacity of 20 per day. As per average demand if we increased the capacity
to 40 only means we could have saved $500,000. But due to increase of capacity to 50 but not 40 we
sold approximately 1312 units higher which values $229934.40. So that the net amount of loss is
equal to $270065.60.
Still in the third year end we had not maintained the inventory for fourth year as we afraid
that there will be low demand in fourth year due to the emerging new technology. But in the fourth
year also the average demand is 39.32, equal to the last three years. By maintaining inventory in
fourth year we increased our sales figure to 13744 comparing to third year (11947) it was about 1800
units higher. But we have loosed 571units which values $158,392.68.

5. In the third year we totally sold 11947 units, in that we shipped 8200 units through mail and
all the remaining by truck, so that truck made approximately 20 trips. Total cost of shipment equals
$1,530,000.00.In the fourth year we totally sold 13744 units, in that we shipped only 100 units
through mail and all the remaining by truck, so that truck made approximately 69 trips in deliver the
drums. Total cost of shipment equals $1,050,000.00.Even though we have satisfied more demand in
fourth year by shipping through truck we saved about $480,000. When the same quantity shipped
through truck in third year means we could have saved about $615,000.00.
And totally we loosed about $1043464.28.
4. CONCLUSION
The healthy approach to attain maximum profit with negligible amount of loss is to satisfy all
customer demand without any demand loss. From this game we understood the strategies of satisfying
demand and the way of foreseeing the demand schedule. Decision taking is a key factor in this game
and it influences the entire game as we seen.