Big Chemical Encyclopedia

Chemical substances, components, reactions, process design ...

Articles Figures Tables About

Capacity as an Operational Hedge to Regulatory Changes

When capacity is chosen in a global supply chain, it may be necessary to anticipate possible opportunities that may arise as countries change their trade agreements, for example. Having locations that can make use of the operational flexibility can have benefits. But all this means paying a price in terms of current performance in order to position the supply chain to have a higher level of average performance. To illustrate such issues, we provide a numerical example. [Pg.89]

Company ABC has two plants manufacturing product A. The first plant is located in Illinois, while the second plant is located in Germany. Both plants have a capacity of 500,000 units per year. These plants have been built primarily to serve two markets the United States and Europe. The unit production cost at the Illinois plant is 1 per unit, while the unit production cost at the plant in Germany is 1.25 per unit. The product demand for the US market is [Pg.89]

000 units per year, while the demand for the European market is [Pg.89]

Consider possible solutions to the production and sourcing decisions under the above cost structure. [Pg.89]

If supplied by the German plant, unit cost is 1.25 + 0.1 = 1.35. The product is cheaper if supplied by the Illinois plant. [Pg.89]


See other pages where Capacity as an Operational Hedge to Regulatory Changes is mentioned: [Pg.89]   


SEARCH



A capacities

A operator

Capacity changes

Hedge

Operating capacity

Operational Changes

Operational capacity

Regulatory capacity

© 2024 chempedia.info