POM for WindowsPOM for Windows

ObjectivesObjectives• Background on SoftwareBackground on Software

• Features of SoftwareFeatures of Software

• Present (2) Real-Life ProblemsPresent (2) Real-Life Problems– TransportationTransportation– Lot-SizingLot-Sizing

• Demonstrate Software’s CapabilitiesDemonstrate Software’s Capabilities

• Have FUN While Learning!!!Have FUN While Learning!!!

Introduction to POMIntroduction to POM

• BackgroundBackground

• ModulesModules

• Handy featuresHandy features

Real-Life Problem #1:Real-Life Problem #1:

TTRANSPORTATIONRANSPORTATION

Definition:Definition:

A transportation problem involves A transportation problem involves transporting items from sources transporting items from sources with fixed supply to destinations with fixed supply to destinations with fixed demand at lowest cost.with fixed demand at lowest cost.

Here’s the problem…Here’s the problem…• COMPANY wants to find the most COMPANY wants to find the most

cost effective way to transport their cost effective way to transport their product from the suppliers to the product from the suppliers to the retailers, based on a shipping rate of retailers, based on a shipping rate of $0.03/mi. and a supply/demand based $0.03/mi. and a supply/demand based on the chart.on the chart.

DataCOSTS marinette oshkosh madison milwaukee SupplyGreen Bay 159 168 396 345 75eau claire 717 552 534 738 60stevens point 495 213 531 327 25rhinelander 342 495 600 801 38Demand 90 32 30 46 198 \ 198

Enter the transportation costs, supplies and demands in the shaded area. Then go to TOOLS, SOLVER, SOLVE on the menu bar at the top.If SOLVER is not a menu option in the Tools menu then go to TOOLS, ADD-INS.

A few TERMS…A few TERMS…• SourceSource

• DestinationDestination

• Objective (min. or max.)Objective (min. or max.)

• Vogel’s Approximation methodVogel’s Approximation method

The PROCESS:The PROCESS:• Step 1: Create Data SetStep 1: Create Data Set

• (#) Source(#) Source• (#) Destination(#) Destination• Objective (min. or max.)Objective (min. or max.)

• Step 2: Populate the TableStep 2: Populate the Table• Rows = SourcesRows = Sources• Columns = Destinations Columns = Destinations

• Step 3: SolveStep 3: Solve• Click on the SOLVE buttonClick on the SOLVE button

What does this give us??What does this give us??

• Explain Results…Explain Results…– Transportation ShipmentsTransportation Shipments– Shipping CostsShipping Costs– Shipments ListShipments List

ConclusionsConclusions• By following the results of the By following the results of the

DSS software, the COMPANY DSS software, the COMPANY can MINIMIZE its total can MINIMIZE its total transportation expenses.transportation expenses.

• Profits will soar!!Profits will soar!!

Real-Life Problem #2:Real-Life Problem #2:

LLOTOT-S-SIZINGIZING

Definition:Definition:

Given a set of demands in future Given a set of demands in future periods, the goal is to place orders periods, the goal is to place orders which meet these demands and which meet these demands and minimize the sum of the costs of minimize the sum of the costs of holding goods from period to holding goods from period to period plus the (setup) costs of period plus the (setup) costs of placing the orders.placing the orders.

Here’s the problem…Here’s the problem…

• COMPANY wants to optimize its COMPANY wants to optimize its lot-sizelot-size

A few TERMS…A few TERMS…• PeriodPeriod• DemandDemand• Holding CostHolding Cost• Setup CostSetup Cost• Stock-Out CostStock-Out Cost• Initial InventoryInitial Inventory• Lead TimeLead Time

• MethodsMethods• Wagner-Whitin(WW)Wagner-Whitin(WW)• Lot-for-LotLot-for-Lot• EOQEOQ• POQPOQ• Part-Period-Part-Period-

BalancingBalancing• User-definedUser-defined

The PROCESS:The PROCESS:• Step 1: Create Data SetStep 1: Create Data Set

• (#) Period(#) Period

• Step 2: Populate the TableStep 2: Populate the Table• 11stst Row = Demand Row = Demand• 22ndnd Row = Values Row = Values• Select MethodSelect Method

• Step 3: SolveStep 3: Solve• Click on the SOLVE buttonClick on the SOLVE button

What does this give us??What does this give us??

• Explain Results…Explain Results…– Lot-Sizing ResultsLot-Sizing Results

ConclusionsConclusions

• By optimizing our By optimizing our lot-size, we can lot-size, we can eliminate eliminate backed-up backed-up inventory, inventory, therefore, saving therefore, saving the COMPANY the COMPANY money!money!

Overall ConclusionOverall Conclusion

UsefulUseful

Competative AdvantageCompetative Advantage