Profit-Driven Network Redesign Through Value-Creation Services
Design of supply chain networks is a key strategic decision in supply chain management. Our capstone sponsor Armada is a supply chain service provider to restaurant chains across the United States. The company is envisioning a redesign of their current service network based on two components: (1) th...
| Main Authors: | , |
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| Language: | en_US |
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2023
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| Online Access: | https://hdl.handle.net/1721.1/152062 |
| _version_ | 1811082331375534080 |
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| author | DeHaan, Morgan Jessica Ke, Yujia |
| author_facet | DeHaan, Morgan Jessica Ke, Yujia |
| author_sort | DeHaan, Morgan Jessica |
| collection | MIT |
| description | Design of supply chain networks is a key strategic decision in supply chain management. Our capstone sponsor Armada is a supply chain service provider to restaurant chains across the United States. The company is envisioning a redesign of their current service network based on two components: (1) the addition of new distribution centers (referred to as iDCs), located closer to high volume service areas, (2) the deployment of value-creating services from the iDCs. In this capstone, we develop a series of models to support these decisions. First, we build a model that identifies demand dense areas as “urban clusters” where an iDC would best serve Armada’s clients. Second, we develop a model that minimizes costs in the network while maximizing revenues through the defined additional services. The results of these models provide us with two distinct network configurations based on cost-minimization and profit-maximization: one placing iDCs by key demand-dense areas and the other favoring high revenue generating regions. This study shows that layering revenue-maximization methodology with cost-minimization algorithms in mixed integer linear programming will alter results and favor the highest revenue generation location(s). |
| first_indexed | 2024-09-23T12:01:26Z |
| id | mit-1721.1/152062 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T12:01:26Z |
| publishDate | 2023 |
| record_format | dspace |
| spelling | mit-1721.1/1520622023-09-09T03:29:13Z Profit-Driven Network Redesign Through Value-Creation Services DeHaan, Morgan Jessica Ke, Yujia Supply Chain Management Distribution Design of supply chain networks is a key strategic decision in supply chain management. Our capstone sponsor Armada is a supply chain service provider to restaurant chains across the United States. The company is envisioning a redesign of their current service network based on two components: (1) the addition of new distribution centers (referred to as iDCs), located closer to high volume service areas, (2) the deployment of value-creating services from the iDCs. In this capstone, we develop a series of models to support these decisions. First, we build a model that identifies demand dense areas as “urban clusters” where an iDC would best serve Armada’s clients. Second, we develop a model that minimizes costs in the network while maximizing revenues through the defined additional services. The results of these models provide us with two distinct network configurations based on cost-minimization and profit-maximization: one placing iDCs by key demand-dense areas and the other favoring high revenue generating regions. This study shows that layering revenue-maximization methodology with cost-minimization algorithms in mixed integer linear programming will alter results and favor the highest revenue generation location(s). 2023-09-08T17:37:06Z 2023-09-08T17:37:06Z 2023-09-08 https://hdl.handle.net/1721.1/152062 en_US application/pdf |
| spellingShingle | Supply Chain Management Distribution DeHaan, Morgan Jessica Ke, Yujia Profit-Driven Network Redesign Through Value-Creation Services |
| title | Profit-Driven Network Redesign Through Value-Creation Services |
| title_full | Profit-Driven Network Redesign Through Value-Creation Services |
| title_fullStr | Profit-Driven Network Redesign Through Value-Creation Services |
| title_full_unstemmed | Profit-Driven Network Redesign Through Value-Creation Services |
| title_short | Profit-Driven Network Redesign Through Value-Creation Services |
| title_sort | profit driven network redesign through value creation services |
| topic | Supply Chain Management Distribution |
| url | https://hdl.handle.net/1721.1/152062 |
| work_keys_str_mv | AT dehaanmorganjessica profitdrivennetworkredesignthroughvaluecreationservices AT keyujia profitdrivennetworkredesignthroughvaluecreationservices |