Creating Price Index for Aucksun

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Creating Price Index for Aucksun

• Kevin M. Vayda
• Bennie Jones
• Zhongwen Zhang
• Dongai Wu
• Zhenqing Pan

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Overview of the past weeks
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Problem Statement
Industry specialty(????)
Core competency(?????)
Enhance performance(????)
Unique nature of product(??????)
Fairly reward the salesmen(??????????)
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Project Goals

• To create a price index(????????)
• To build up a mechanism to fairly reward
  Aucksuns salesmen (???????????????)

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• Basic information
• Aucksun is established under the joint investment
  of Jiangsu Australia Industry Corporation and the
  Hong Kong Chang-Zheng, Ltd.(????????????(??)??????
  ???????????)
• The land area is about 24,000m2 with the
  construction area of 9,600 m2.(?????9,600
  m2,?????24,000m2 )
• Its production and processing capacity is
  attainably 132,000 tons per year, processing
  steel production 8,000 to 10,000 tons per month
  and aluminum 1,000 tons per month.(?????????132,00
  0??????????8,000?10,000?????????1000??)
• The inventory is 30,000 tons of steel and 2,000
  tons of aluminum. (????3????2????)
• The current number of customers is about
  300.(???????300?)

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Organization Chart

• The old one

• The new one

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Operation---Purchasing Mode
Regular Purchasing
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Operation---Manufacturing Mode
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Operation---Functional Module of ERP
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Preliminary Study
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The Steel Industry

• Customers need a middleman
• Order times are small
• Need more cooperation within depts.

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Requirements

• Make-to-order
• Optimize manufacturing process
• Budget control
• A code management system
• Take customs into consideration

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The Bonus System

• PBT
• Rewarding sales dept
• Fluctuating profits on steel

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Price Index System

• London Metal Exchange
• Mysteel Price Indices of China
• Indices and Aucksun

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Literature Review
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Literature Review

• Eliminated some literature on inventory.
• Reviewed new literature on price indices.
• Created new format
• Risk
• Supply Contracts
• Price Indices

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Methodology
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Methodology

• First Objective Identify the problem.
• Method Examine Aucksuns main risks
• Inventory
• Supply
• Price
• Customer Segmentation
• Method Communicate with management.

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Methodology

• Second Objective Understand how indices are
  created.
• Method Study LME Index.
• Method Study existing steel indices and their
  relationship with the index we want to create.
• Method Examine risk factors that may influence
  the index we want to create.
• Method Determine which data will need to be
  collected.
• Method Collect data.

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Methodology

• Third Objective Develop and implement an index
  for the current problem.
• Fourth objective Evaluate the implemented index.

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Results and Findings
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The existing bonus system in Aucksun
Price of productions

• The reset price reflects the changing raw
  material prices.(????????????????)
• Although there are many other object factors in
  this formula, but they are stable in
  general.(?????????????,??,????,????????)
• The ? stands for the added value of the products,
  and this is the exact factor that could be used
  to evaluate the performance of the sales
  employees.(??????????,?????????????????)

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Price index for aluminum productions
LME index is a price index for aluminum.
(????????????????) To Aucksun ,the price of
aluminum production is Price LME Processing
Fee ? ? is a value to measure the salesmens
performance. (??????,??????? ?? LME ??? ?,
???????????????)
But, what about steel productions?
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The existing index for steel price index

• Myspic is short for Mysteel price indices of
  China. The price information used by Myspic is
  the daily concluded price in the market from
  seven big cities in China, they are Shanghai,
  Guangzhou, Beijing, Wuhan, Chongqing, Shenyang
  and Xian.(Myspic????????????(????????????????????)
  ????????)

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The existing index for steel price index
Preset MySpic Index MySpic Index Price
MySpic Index Price is a value that Aucksun set
depending on their experience.(Myspic?????????????
?????)
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Other indexCRU

• The CRU Steel Price Index is a leading indicator
  of steel price trends. There are eight indices
  are weighted and compiled to form the CRUspi
  indices. (CRU???????????????????,????????????)
• On the CRU website there is a Market Analysis
  page in which the monitors listed above can be
  examined. The analysis of these monitors also
  provides historical and statistical data on steel
  indices, along with written analysis by CRUs
  full-time steel analysts with respect to market
  fundamentals and other important aspects. There
  is a new CRUspi Futures service at
  www.crumonitor.com which examines, in detail,
  forecasts for the steel indices for the future
  18-24 months.
  (?CRU???????????????????????????????????????????
  ,??CRU????????????CRU?????,????1824?????????)

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Results and Findings
CRU Myspic
Existing index
SPSS
Index
CPI of Home Applicants
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Future Plan
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Plan for Next Week
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Questions for Discussions
1.Is SPSS a suitable tool for the project? Or
what tools will be useful,except SPSS? 2.What
kind of help can we get from the master students?
And Who is going to help us?