Application Study Of Mathematical Modeling In Supply Chain Management

DT (II), PCEBG, Foxconn Technology Group is an OEM division dealing with manufacturing personal desk-top computers for D customer, who, facing the fast developing and growing competitive market, has planned to redeploy its operation emphasis by adopting several parallel strategies to reduce operation cost and strengthen competitive capability as well. As a sub-tier supplier, Foxconn is also confronting the same task to accommodate cost reduction within internal supply chain. Reasonable production plan and stock level can decrease the manufacturing cost and have become the most important problems that need to be studied for DT(II)in Foxconn Technology Group in the future.As OEM enterprise, it's general operation process is designed based on customer/market requirement, along the line from product design, material purchasing, product manufacturing, finished goods delivery to customer to after-sell service providing. Within above procedure, manufacturing objects can move from supplier to customer along an value-added chain which forms a supply chain .This paper is trying to study through mathematical modeling on each section of supply chain while it's getting value added. With analysis on the constructed model of demand and supply together with production cost structure inside the supply chain, this paper presents us a way to deal with conflict between supply and demand in production and to reach the target of cost reduction.The core of this paper is to collect and analyze data from supply chain management in Foxconn Technology Group, and find the direction accordingly to improve stock level and production batch. Based on the on-site data collection and screening system, the paper presents strategies for finding the approximate optimal stock level which can also ensure production stabilization under stock management theory; and it can also detect the co-relationship and characteristic function value using the tool as curve fitting and calculus. This paper also presents some strategies to find the approximate optimal batch quantity under current processing level by monitoring stock cost fluctuating principle with adjustment of manufacturing lot size. Finally, the paper presents some practical results by applying the mathematical modeling technique to production line. The result indicates that the company's goal has been attained since the production system runs in a highly efficient and economically way. The production capacity has been improved and the operations cost has also been reduced significantly.