Abstract
This article aims presenting an example of quantitative modeling and optimization techniques application to the design of the distribution network of a consumer packaged goods company in São Paulo, Minas Gerais and Paraná states, Brazil. First, it is made a brief review of quantitative modeling techniques as they are applied in the modeling and optimization of network problems. In the second section it is depicted the company's distribution problem, which had been developed as part of a consulting project developed by EAESP/FGV's Empresa Júnior. The model is then optimized through a series of software so the methodologies and results can be compared. The article finishes with the results that the company got from the model deployment, presenting a clear case of optimization techniques in a real world application, showing the viability of easily using such techniques in a broad range of distribution and logistics problems.DOI: 10.12660/joscmv6n2p74-93URL: http://dx.doi.org/10.12660/joscmv6n2p74-93
Highlights
This article aims presenting an example of quantitative modeling and optimization techniques application to the design of the distribution network of a consumer packaged goods company in São Paulo, Minas Gerais and Paraná states, Brazil
This study shows that economies of 5% to 10% can be quickly achieved by the application of linear optimization technics showing a vast area of improvement for Brazilian economy, with minimal investments, on a macroeconomic scale
Considering that the company’s total logistic cost was approximately R$ 45M, with a total of 5 DCs, based on the results presented above the company would be able to achieve a total cost reduction of about 28%, representing a total of R$ 17M in economies, on a quarterly base, just by redesigning their distribution network
Summary
Several linear (and nonlinear as well) optimization techniques have been tailored to them, allowing managers and researchers to have them applied in a variety of different situations (Geunes & Panos, 2005); (Winston, 2003). The usage of these techniques by a broad, non-technical audience have been much increased through the ness school in Brazil. On the CPG company which is the study object of this article will be just called “company”. The objective is to minimize the overall distribution costs through the adequate choice of distribution centers, DCs (“centros de distribuição” as they are called in Portuguese), transport routes from factories to DCs and the appropriate assignment of customers (mainly wholesale companies and supermarkets) to each DC, based on demand and costs levels
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