WORLD BICYCLE RELIEF Case Solution & Answer

World Bicycle Relief Case Solution 


FK Day and Dave Neiswander are the leaders of a social enterprise, named: World Bicycle Relief, which is also known as WBR. The global bike rescue program is a very successful program. Since its inception, more than 392,000 bicycles have been donated or sold in 19 developing countries. WBR has improved the lives of thousands of people by providing robust bicycles to disaster victims, medical staff, students and entrepreneurs. After the December 2004 tsunami, FK Day and his wife wanted to know how they could help the victims.(Glinsky, 2018).

As soon as they saw the impact of the affected area; they found that the biggest problem was traffic. Day and his team worked with Sri Lankan suppliers, to design high quality bikes. After distributing more than 24,000 bicycles to the tsunami survivors, community workers, students and entrepreneurs, it became a very effective concept that attracted many partners. WBR explored further possibilities for the concept. The company decided that it should extend the project to other countries in need.

Today, WBR is a combination of non-profit and profitable organizations. The organization has expanded with nonprofits to profits, in order to reduce the need for donations and grants. In the year 2017; 400,000 bicycles were distributed to students, entrepreneurs and health professionals. Today, the World Bicycle Rescue Organization hopes to extend its activities to other countries in Africa.

Objective and Key Performance Matrix

As the organization grows, leaders want to improve their operations and wish to enter new markets. The World Bicycle Rescue Organization must act in accordance with its operating model so as not to cause the inefficiency and waste of new market resources.

FK Day is owned by SRAM, but that does not help much, as SRAM is not a bike manufacturers. SRAM has developed a new travel technology for high-end bikes. It does not have a technical or design team. Therefore, Day needs to work with local suppliers. With the experience and cycling knowledge;it can assess the quality of the chosen bike. After Zambia asked WBR to provide a bike for the caregivers, he tried to use the same technology as he did in Sri Lanka, but quickly found out that Zambia’s quality was unsatisfactory.

Because it can work with the team that creates the most durable bike, the product needs to be disassembled, shipped and then assembled in Zambia. The problem is that assembly work is done by unskilled workers, supervisors do not speak English, and workers rarely think about or give preference to the quality. Finally, WBR implemented the assembly process in-house and worked with the supply chain to develop new products. Day was able to further improve the product’s design, monitor the bicycle usage and identify the frequently replaced parts.

After setting up these things, World Bicycle Relief launched a strong and rugged product and there was a great demand for it. It is very expensive because of the quality of the bikes, and the revenue from the sale of the bikes can finance it, which is not for the benefit of the organization. They took on the challenge because of their great success and the large number of bikes. WBR’s long-term challenge is to produce high-quality products, train mechanics, continuous product innovation, frequent replacement of parts, language constraints and economic sustainability.

10 Year Optimization Model

The 10-year linear programming model has been developed by using 3 million dollars donations each year, with the total annual demands of approximately 20,000 unitsof bikes. The average per unit expense cost has been taken form the Exhibit 2 of the case, which is divided by the number of units sold during the year, which is 392,000 units in all the regions.

In addition to this, the total shipping cost per unit has been taken by dividing the shipping cost per container by the number of units in a container, which is 10000 units in a container and the container shipping cost is 7000 dollars,resulting in the per unit of 0.7 dollars. The per unit total expenses cost is 27 dollars, which is the result of the service expense of 10594283 dollars divided by the number of units sold during the year, which is 392000 units.

The limitations or constraints used in the optimization models, are as follows:

  1. Number of bikes donated per year must be an integer.
  2. Number of bikes produced and sold for profit per year must be an integer.
  3. Number of bikes donated per year should not be lower than 10000 units per year.
  4. Number of bikes produced and sold for profit per year should not be more than 10000 units per year.
  5. And, the sum of the number of bikes donated per year and number of bikes produced and sold for profit per year, must not be greater than 20000 units per year………………
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