Case ID: QA-0315
Solution ID: 39909

Florida Glass Company A

Case Analysis

The materials manager of the Florida Glass Company noticed that the monthly run of the Energy Planning Model was scheduled for that day. This model calculated the optimal mix of products for the coming month and the quantities of energy (electricity and distillate fuel oil) required. In the past, when the manager had received the results of the model, he had simply placed an order for the recommended quantity of distillate fuel oil. But now he decided to question his perfunctory monthly ordering of distillate as the model made calculations on a monthly basis, and as a result, it ignored the opportunity to purchase more than one month's supply of distillate, even though ample storage capacity was available. During the past few years of oil price volatility, he had never taken advantage of a relatively low price, and the current situation in October 1982 seemed an ideal time to address the policy of single-month purchases.


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