Difference between revisions of "ANLY482 AY2017-18T2 Group27 : Project Findings"

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Rate Per Kg (RpK)
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Company X required 3 modules for their data visualisation:
DHL has different rates for different customers and different routes. These rates are based on air freight services provided by external airlines, which are also dependent on the routes, weight and volume. To retain customers, DHL offer contractual rates. These rates are based on loyalty of customers, their shipping volume, weight and their frequency. Also, any ad-hoc delivery requested by DHL’s customers will be charged at a higher rate.
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1. Rate per Kg (RPK)
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2. Density
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3. Ship to Profile (STP)
  
Density
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==== 8.1 RPK ====
One issue faced by DHL is the optimisation of the cargo mix for the client. Currently, DHL relies solely on the transactional data provided by its clients to buy up cargo capacity. This is based on the forecasted weight and volume of goods. However, when there is an over or under shipment of cargo, DHL would have to bear the additional cost of the unused capacity. Since DHL engages external airlines, these costs are chargeable; an extra charge for dense shipments and volumetric shipments that have an unused capacity is a sunk cost. Without an efficient tracking system on the density of its cargo shipped, DHL is unable to determine how much additional costs it is incurring and hence, it faces difficulty in reducing these costs.
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The variables used in RPK: Chargeable weight (WGT) and Freight Charges (WTCHG).
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====WGT====
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We first looked at the variable chargeable weight generally. Chargeable weight (WGT) has a wide range of values from 0.1kg to 270000kg. Despite bringing this up, it was flagged as normal data by Company X. The wide range of data can possibly be attributed to the size of the shipment or contractual terms. Blank WGT entries were deemed as incorrect entry by ground staff or cancelled entries.
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Subsequently, we looked at WGT across the GE BUs.
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The large range of data is also seen across the regular BUs (with contract) and other non regular BUs (without contract).
  
Ship To Profile (STP)
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In general, the shortest interval for 50% of the data is ends at the median or below the median. Moreover, the histogram is skewed to the right. This can be due to the few large outliers, visible in our box chart graphs below. The similar distribution pattern, across all BUs may suggest that there are huge shipments made by all BUs sometimes.
For every account, there is a stipulated projected shipment volume in the contract for each country lane.  Despite the stipulated contractual amount, there are always discrepancies in the projected shipment volume and the actual shipment volume. In some country lanes, the account ships drastically more or less than the projected amount. The GAMs inability to spot volume trends and monitor actual shipping amount will result in additional costs for DHL.
 
  
==== 8.1 RPK ====
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These huge range in chargeable weight of shipments may be due the nature of goods delivered. These BUs are from the manufacturing industry. Parts shipped may sometimes be as light as a small shipment of long term employment certificate or as heavy as a stack of legal documents, in the case of Corporate.
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However, the chargeable weight for shipments by non-regular BUs seem to have a larger range of outliers than regular BUs. As non-regular shipment is generally costlier, this presents an opportunity for DHL CSI team to engage these non-regular BUs for a contract. This may interest the BUs as it is a cost-saving opportunity for them too.
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===WTCHG===
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WTCHG, total air freight for the shipment,  appears to follow a similar distribution to WGT, where both regular and non-regular BUs’ mean is higher than its median. This means that their histogram is skewed to the right. This is as expected as air freight shares a positive relationship with chargeable weight.
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Interesting to note, in WTCHG, Aviation is more than non-regular BUs, the opposite of the trend in WGT. This may be due to extra shipment during peak seasons or extra urgent shipment requested by Aviation.
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===RPK===
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In the overall summary statistic of RPK, those in the 0.05% percentile are between $404.33735/kg and $21986.66/kg.
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Only 3 of the 180 transactions are dangerous goods. These dangerous goods are requested by Aviation, specifically Aircraft Engines. As they are from Aircraft Engines, these dangerous goods may be flammable. Their unusually high RPK can be attributed to the additional service or special aircraft provided by Company X to ship the dangerous goods.
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The other 177 shipments are non dangerous goods. More investigation for details have to be conducted to reason this occurrence.

Revision as of 13:29, 2 March 2018

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ANLY482 AY2017-18 T2 Projects

8.0 Project Findings

Company X required 3 modules for their data visualisation: 1. Rate per Kg (RPK) 2. Density 3. Ship to Profile (STP)

8.1 RPK

The variables used in RPK: Chargeable weight (WGT) and Freight Charges (WTCHG).

WGT

We first looked at the variable chargeable weight generally. Chargeable weight (WGT) has a wide range of values from 0.1kg to 270000kg. Despite bringing this up, it was flagged as normal data by Company X. The wide range of data can possibly be attributed to the size of the shipment or contractual terms. Blank WGT entries were deemed as incorrect entry by ground staff or cancelled entries.

Subsequently, we looked at WGT across the GE BUs.

The large range of data is also seen across the regular BUs (with contract) and other non regular BUs (without contract).

In general, the shortest interval for 50% of the data is ends at the median or below the median. Moreover, the histogram is skewed to the right. This can be due to the few large outliers, visible in our box chart graphs below. The similar distribution pattern, across all BUs may suggest that there are huge shipments made by all BUs sometimes.

These huge range in chargeable weight of shipments may be due the nature of goods delivered. These BUs are from the manufacturing industry. Parts shipped may sometimes be as light as a small shipment of long term employment certificate or as heavy as a stack of legal documents, in the case of Corporate.

However, the chargeable weight for shipments by non-regular BUs seem to have a larger range of outliers than regular BUs. As non-regular shipment is generally costlier, this presents an opportunity for DHL CSI team to engage these non-regular BUs for a contract. This may interest the BUs as it is a cost-saving opportunity for them too.

WTCHG

WTCHG, total air freight for the shipment, appears to follow a similar distribution to WGT, where both regular and non-regular BUs’ mean is higher than its median. This means that their histogram is skewed to the right. This is as expected as air freight shares a positive relationship with chargeable weight.

Interesting to note, in WTCHG, Aviation is more than non-regular BUs, the opposite of the trend in WGT. This may be due to extra shipment during peak seasons or extra urgent shipment requested by Aviation.

RPK

In the overall summary statistic of RPK, those in the 0.05% percentile are between $404.33735/kg and $21986.66/kg.

Only 3 of the 180 transactions are dangerous goods. These dangerous goods are requested by Aviation, specifically Aircraft Engines. As they are from Aircraft Engines, these dangerous goods may be flammable. Their unusually high RPK can be attributed to the additional service or special aircraft provided by Company X to ship the dangerous goods.

The other 177 shipments are non dangerous goods. More investigation for details have to be conducted to reason this occurrence.