Case Study 1 BioPharma, Inc. 1. How should BioPharma have used its production network in 2009? Should any of the plants have been idled? What is the annual cost of your proposal, including import duties? It produces and sells its same kind of products in both of chemicals for any parts of the world. If its plants in one country are not enough products, it would move products from other countries to add the number of products that are sold in this country. Plants of Relax in Germany and Japan have been idled. The total annual cost is $1,488. 1 million including: * Total Transportation Cost is $24. 85 million * Total Production Cost is $1,268. 31 million * Total Tariffs is $195. 15 million 2. How should Phil structure his global production network? Assume that the past is a reasonable indicator of the future in terms of exchange rates. Dollar and Peso have been decreased to compare with the Euro, Real, Rupee and the Yen the last three years include 2007, 2008, and 2009. However, the business cycle needs to retain capacity and capabilities throughout the entire supply chain.
Therefore, production can be diverted as currencies move against each other. 3. Is there any plant for which it may be worth adding a million kilograms of additional capacity at a fixed cost of $3 million per year? There is no any plant for which it may be worth adding a million kilograms of additional capacity at a fixed cost of $3 million per year. 4. How are your recommendations affected by the reduction of duties? If the BioPharma, Inc. wants to reduce duties, it would increase production in Germany, Japan, and The U. S. nd decrease imports into Latin America, Asia without Japan, and Mexico. 5. The analysis has assumed that each plant has a 100 percent yield (percent output of acceptable quality). How would you modify your analysis to account for yield differences across plants? To change the percentage yield, BioPharma, Inc. need to desert capacity or decrease the amount of shipment. 6. What other factors should be accounted for when making your recommendations? Factors should be accounted for when making my recommendations such as disasters, delay, inaccurate forecasting, and inventory.