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? This is a group assignment with maximum three students in each group

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? This is a group assignment with maximum three students in each group.

? Submit a softcopy of the report (one report from each group) to Turnitin in Canvas

by the due date (see item 1 above for due date).

? Submit video clip of (4-6mins) to Canvas by the due date (see item 2 above for due

date).

? A penalty of 10% of possible marks will be imposed per day for

late.

? Use the UTS Assignment coversheet downloaded from the “Module>Get

Started>Subject Resources” page in Canvas. This MUST be placed on the front of

your report.

? The Marking Guide for Assignment 2 is posted at Canvas.

? Use appropriate UTS referencing style throughout your assignment (refer UTS Library

site for details).

? Refer Assignment 2 (Group Assignment) in Canvas for further instructions.

Objectives addressed by this Assignment;

? Understand the business problem from the perspective of supply chain and operations

management lens such as - Supply, Demand, Sustainability and Decision Making.

? Determine Strategic Options/recommendations and quantify the benefits (tangible and

intangible) and the risks to achieve the expected outcomes.

? Apply research skills and appropriate methodologies to solve optimisation problems

Value Chain Engineering Systems Group Assignment 2: Engineering the supply chain of BarCo Corporation Total marks - 50% of total subject marks 1. Due date for Report: 23:00 16th May 2021 (one report from each group) 2. Due date for Video: 23:00 23rd May 2021 (submitted by each student) Note: ? This is a group assignment with maximum three students in each group. ? Submit a softcopy of the report (one report from each group) to Turnitin in Canvas by the due date (see item 1 above for due date). ? Submit video clip of (4-6mins) to Canvas by the due date (see item 2 above for due date). ? A penalty of 10% of possible marks will be imposed per day for assignments submitted late. ? Use the UTS Assignment coversheet downloaded from the “Module>Get Started>Subject Resources” page in Canvas. This MUST be placed on the front of your report. ? The Marking Guide for Assignment 2 is posted at Canvas. ? Use appropriate UTS referencing style throughout your assignment (refer UTS Library site for details). ? Refer Assignment 2 (Group Assignment) in Canvas for further instructions. Objectives addressed by this Assignment; ? Understand the business problem from the perspective of supply chain and operations management lens such as - Supply, Demand, Sustainability and Decision Making. ? Determine Strategic Options/recommendations and quantify the benefits (tangible and intangible) and the risks to achieve the expected outcomes. ? Apply research skills and appropriate methodologies to solve optimisation problems Problem Context: The General Manager of BarCo Corporation, received notification from MaxEnergy that natural gas supplies were being rapidly depleted. In the event of a shortage, MaxEnergy, the main producer and distributor of natural gas in the region, would allocate gas to its customers under the following provisions established by the Federal Commission: First Priority: Residential and commercial heating and cooling Second Priority: Commercial and industrial firms that use natural gas as a source of raw material Third Priority: Industrial firms that use natural gas as a boiler fuel In the communication, it was mentioned that most of BarCo's uses were in the second and third priority classifications. Hence, BarCo would probably be subjected to "rolling brownouts", temporary and periodic curtailments of natural gas supplies. MaxEnergy planned to monitor its pipeline pressures and order reductions to maintain minimum levels. MaxEnergy preferred that its customers initiate the reduction process to minimize the effect on their industrial processes. MaxEnergy was authorized, however, to curtail supplies unilaterally if pipeline pressure fell below minimum levels. The natural gas shortage was created by the unprecedented heat wave/bushfires of the summer of 2019. Electrical generating plants were operating at capacity to supply electricity to operate air conditioning and refrigeration units. Although, long-range plans called for these utility companies to convert to coal, oil, or nuclear fuel, natural gas remained the dominant boiler fuel. CURTAILMENT PLAN BarCo's problem was to determine which of its products would be least affected by the gas curtailment. All of the BarCo complexes would be included in the curtailment region in the event of a brownout. Except for BarCo's ammonia operations, all gas purchased was used as boiler fuel. In its ammonia plant, gas is used as a source of raw materials which is less polluting (compared to its use as a boiler fuel) and in-line with BarCo’s sustainability plan for the future. In a detailed discussion with the CEO of MaxEnergy, BarCo learned that MaxEnergy would not specify the products to be curtailed. The curtailment procedure would be based primarily on a customer's usage pattern. Hence, BarCo had the flexibility to absorb curtailments where they would have minimum impact on profits. Based on this information, BarCo called a staff meeting to discuss a contingency plan for allocation of natural gas among the firm's products if curtailments became a reality. The specific objective was to minimize the impact on profits/overhead contribution. After a week of study, the information in Tables 1, 2, 3 was presented to BarCo management. TABLE 1 Contribution to profit and overhead Product $/Ton Ammonia 134 Ammonium phosphate 80 Ammonium nitrate 100 Urea 122 Hydrofluoric acid 96 Chlorine 110 Caustic soda 75 Vinyl chloride monomer 85 TABLE 2 Operational data Product Max. Capacity (tons/day) Production Rate (% of capacity) 600 90 Ammonium phosphate Ammonium nitrate 1,600 800 80 70 Urea 1,400 60 200 80 1,500 80 700 70 1,500 80 Ammonia Hydrofluoric acid Chlorine Caustic soda Vinyl chloride monomer TABLE 3 Natural Gas consumption data Product Natural Gas Consumption (1,000 cu. ft./ton) Ammonia 19 Ammonium phosphate 13 Ammonium nitrate 20 Urea 12 Hydrofluoric acid 19 Chlorine 11 Caustic soda 14 Vinyl chloride monomer 12 BarCo has three manufacturing plants (A, B and C) and MaxEnergy supplies Natural Gas to these plants from its existing 3 locations (I, J, K). The distribution costs and the supply and demand data is provided in Table 4. TABLE 4 Distribution cost ($ per unit) and Supply/Demand data I J K Demand A 1.3 1.2 1.8 20,000 B 1.2 1.4 1.6 50,000 C 1.6 1.5 1.4 15,680 Supply 20,000 40,000 25,680 Assuming the distribution costs are paid by the BarCo, the management team also wants to identify the best distribution plan under curtailment. BarCo's contract with MaxEnergy specified a maximum of 90,000 cu.ft. X 103 per day for its complexes. However, curtailments are projected to be based on actual usage rather than contractual maximums. The current natural gas usage is 85,680 cu. ft. x 103 per day. MaxEnergy projects curtailments in the range of 20 to 40 percent and it impacts all of the MaxEnergy plants equally. Tasks (To be included in the Report): 1. Define the business problem and come up with a Linear Programming model which can be helpful in analyzing this situation 2. Formulate and resolve production plan for 20 and 40% curtailment of natural gas usage 3. Formulate and resolve distribution plan for 20% and 40% curtailment scenarios 4. Based on your analysis, provide a discussion on BarCo’s options and your recommendations for (i) the production and (ii) distribution plan; during the curtailment scenario 5. Conduct the sensitivity analysis for baseline scenario and describe the key outcomes (for both production and distribution plans) in simple terms for the top management 6. Contribution to profit and overhead for products from BarCo has a lot of fluctuations. Provide your recommendations for the management in terms of the impact of such changes on the production plans. Note: To be successful in this assignment you need to exhibit analysis of your research in all your discussions, and then the deductions resulting from that analysis. Tasks (To be included in the Video): 1. 2. 3. 4. Describe the problem with appropriate level of details Identify and justify the analysis method chosen to solve this problem List down key assumptions that were used while solving this case study Provide a summary of results obtained from the analysis and key recommendations Assignment Format For Report: Length: Font size: Line spacing: Coversheet: Marking Guide: Headers: Footers: Referencing: 12-15 pages (max) of original content 12pt Times New Roman 1.5 or double line spacing Attach standard UTS assignment coversheet (available in Assignments in Canvas) Makes sure all students sign next to their names Place immediately behind Turnitin screenshot. Show your Group member names & student IDs, Group number, and report title showing “49680 VCES” + semester and year. Show page number and date. Use UTS referencing only (See Referencing in the UTS library website) For Video: Length: 4-7mins (max) Filename: Lastname, Firstname_StudentID_Video Key points: 1. Each group member needs to upload his/her video addressing key tasks mentioned above 2. Your face should be clearly visible in the video 3. Please use Kaltura Capture available at (kaltura.uts.edu.au/) to record your video. Marking (Report and Video) Feedback will be provided by annotating your report with comments and/or by indicating the merit of sections of your report using the following; Z, P-, P, P+, C, D, H (or HD). For Report: Criteria ? Executive Summary, Introduction. ? Clear description of problem, scenarios and the benefits and risks to the business and industry. ? Clear and succinct problem formulation (using LP) Weightings 10% 20% 20% ? ? Extent of analysis, with views well-argued and backed by relevant quantitative measures. Use of reflective thinking. 40% Conclusions and related outcomes (implications and consequences) 10% For Video: Criteria ? Clarity in explaining the business problem Weightings 20% ? Explanation of analysis approach used with key assumptions 30% ? Summary of results obtained from the analysis 20% ? Clarity in providing recommendations to senior business managers to take appropriate decisions based on your analysis 30%