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UBC Theses and Dissertations

Aggregate logistics optimization for a large beverage company Wu, Ernest Hongtu

Abstract

In 2002, The Centre for Operations Excellence (COE) at UBC Commerce carried out a logistics optimization project for Mark Anthony Group (MAG), a manufacturer and distributor of premium wine and alcoholic beverages. The goal of the project was to determine a production, distribution and inventory plan for MAG's "Mike's" products in the US market, that minimized the total logistics cost. It is a multi-commodity, multi-period network flow problem formulated as a linear program with 48,000 decision variables and over 16,000 constraints. Based on the LP model, COE developed a customized computer based planning tool, Aggregate Logistics Optimization Tool (ALOT). ALOT is designed to be an operational tool, providing recommendations on monthly production, distribution and inventory plans for MAG planners. Also, ALOT could be used as a tactical planning tool, supporting MAG's capacity planning, investment, transportation mode choice and other business decisions. ALOT has changed the way MAG does business planning. With ALOT being implemented by MAG, the production plan in 2003 is expected to be significantly different from that in 2002.

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