MBMB22 Consulting ConsultingManufacturing Intelligence

Mark BaconMichael Breed

Pro-Bono Consultants

Senior DesignMay 7, 2002

Optimizing Distribution

Forecasting Capacity for Growth

Current Situation

Brinker $3 Billion company

Own numerous concepts, hundreds of stores• mom-and-pop store mentality

• business operations of various concepts vary

Plans for growth of several concepts

Problems/Concerns with Current Situation

Need to Optimize Production and Distribution

Do they have the production capacity for the projected growth

Objectives

•Optimize distribution in attempt to utilize maximum existing capacities and meet projected growth

•Analyze potential scenarios to increase capacities

•Cost benefit analysis of scenarios

Problem Formulation

•Collecting of Data

•Network Sketch• arcs, varying distribution costs

• production costs of plants

•Integer Program, AMPL model

•Three year projections for three concepts

Scenarios Run on AMPL Model

1. Current Conditions

2. Increase Production Schedule• increase work week form 5-20hr days to 6-20 hr days

• requires additional freezers in Santa Ana and Chicago

3. Equipment Investment

4. Increase Production Schedule and Equipment Investment

Results

1 2 3 43,758 4,342 7,519 8,643

104 92 56 37142 154 190 209

26.46479 28.19481 39.57368 41.35407

48.66667 88.25 59.15789

Unserviced Stores

Cost per Add'l Store Serviced

Scenario Comparisons

Cost (thousands)

Cost per Serviced Store

Serviced Stores

Cost per Serviced Store

20

25

30

35

40

45

1 2 3 4

Scenario

Co

st (

tho

usa

nd

s)

Stores Serviced

100120140160180200220

1 2 3 4

Scenario

Num

ber o

f Sto

res

Conclusions/Recommendations

1. Stretch current fixed assets• Implement increase in production schedule to 6-20hr days

• Streamline current production process to reduce waste

2. Research Substantial Facility and Equipment Investment

3. Facilitate initial growth with distribution that utilizes capacity capabilities