OTM 714 – Supply Chain Analytics

Assignment 1 (Team) – Due February 7, 2019

(Submit via Canvas by 11:59pm)
Schneider Tractor Balancing Problem

Headquartered in Green Bay, Wisconsin, Schneider National is a leading provider of truckload,

logistics and intermodal services. Their fleet consists of over 9700 trucks, 31,500 trailers, and
16,850 intermodal containers. In order to provide reliable service and to ensure driver safety, the
company manages the age and mileage characteristics of the vehicles in their fleet.
This assignment focuses on the management of these characteristics for their fleet of truck
tractors (the part up front with the engine, the driver, etc.). The spreadsheet “Schneider
Assignment Data.xlsx” contains data on more than 4500 of the company’s tractors. The specific
variables included in the data are as follows.
A: TRAC_NUM – This is just a number assigned to each tractor record in the data set.
B: RUN_TYPE – This variable represents the assignment of the tractor to one of two parts of the
business (Dedicated or OneWay) based on the types of shipping runs it makes. Tractors
categorized as “Dedicated” are dedicated to particular customers/routes, while those categorized
as “OneWay” tend to be used for one-way shipments without standing return orders.
C: MAKE – This is the name of the company that manufactures the tractor (disguised to obscure
vendor relationships).
D: MODEL – This is the particular model of the tractor (again, disguised).
E: Year – This is the model year of the tractor.
F: X12.Wk.Mileage – This is the number of miles this tractor has driven in the past 12 weeks.
G: LTD_Miles – This is the total lifetime-to-date odometer mileage on the tractor.
H: Age.Months – This is the age of the tractor in months.
I: IN_SERV_DT – This is the date on which the tractor went into service.
In order to avoid operating tractors that are too old or have too high of mileage, Schneider has a
policy of retiring (trading or selling) tractors when they reach 7 years (84 months) of age, or
when their mileage reaches 714,000 (whichever happens first). They can achieve maximum
value for the tractor (considering both useful life and trade-in value) if it reaches both limits at
the same time – i.e., if it is retired at 84 months with 714,000 miles. Any deviation from this
“sweet spot” results in some loss of value. Specifically, if the truck reaches the age limit first
(when the miles are lower than 714,000), Schneider estimates a loss of about $0.02 per mile
short of the mileage limit (i.e., a “cost” of $0.02*(714,000 – mileage when retired)). Similarly, if
the tractor reaches the mileage limit first, there is a loss of about $50 per month short of the age
limit (i.e., $50*(84 – age in months when retired)).
The company has noticed that many of their tractors miss the sweet spot for retirement, with
some having too high of a mileage profile and some too low. They also have noticed that the two
parts of the business tend to have somewhat different mileage profiles. In light of this, they are
considering some kind of a swapping program – where some tractors from one part of the
business are swapped with tractors from the other part. They estimate that making such a swap
would cost about $1000 (for the pair of tractors).
Your assignment is to explore this swapping idea as follows:
1. Use Tableau to explore the data and identify the extent of the problem, and to come up
with ideas for how to manage the swapping.
2. Use Excel to codify whatever swapping scheme you come up with – using basic data
manipulation, optimization, decision rules, Visual Basic macros, etc.
3. Use Tableau and Powerpoint to prepare a presentation summarizing the problem and your
solution to it.
Steps 1 and 2 are for your use only, and should not be submitted. Step 3 will result in three files
– a Tableau file containing the visualizations for your presentation in “Story” format (including
interactive capabilities as appropriate), an Excel file containing the data set referenced by your
Tableau file (in case you add any variables or manipulate the data directly in Excel), and a
narrated Powerpoint file with slides containing those visualizations (copied and pasted from
Tableau), with team members narrating the presentation (telling the story) over the slides. (Do
your best to use Tableau capabilities to create and annotate your visualizations, but you may add
a minimal amount of extra Powerpoint highlighting/annotation/etc. if necessary. Your slides can
also include some text, but the primary focus should be on the visualizations, with some minimal
explanatory text combined with voice explanations.) Please these files via Canvas. I will
primarily focus on the Powerpoint presentation, but may explore your Tableau file if I want to
interact with it and/or probe more deeply.
Your presentation should be as concise as possible, while still being clear. It should emphasize
visualization and embody good visualization principles (as discussed in Class 4). It should
include the following elements:
• Illustration of the “problem”
• Brief description of the proposed swapping policy (e.g., At what point and how many
times in the life of a truck would you review it for possible swapping? How would you
identify pairs of trucks to swap? How would you compute a cost metric? What
assumptions are you making – e.g., about future truck mileage? Etc.). A slide describing
this might be a little more text-heavy, but ideally should focus on visual illustration –
e.g., of a sample swap.
• Illustration of how the system would behave differently under this policy, with
comparison to what would happen without the policy.
• Estimation of the annual cost savings of implementing this policy.
The presentation should be 5-7 minutes long, and all team members should speak during part of
the presentation. Though your swapping policy should be logical and avoid inconsistencies,
don’t drive yourself crazy with that part – the primary focus is on the visual story-telling.