SMU EMIS 4395 - Optimization of Production and Distribution for Brinker International

Unformatted text preview:

Page 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8Page 9Page 10Page 11Page 12Page 13Page 14Page 15Page 16Page 17Page 18Page 19Page 20Page 21Page 22Page 23Page 24Page 25Page 26Page 27Page 28Page 29Page 30Page 31Page 32Page 33Page 34Page 35Page 36Page 37Page 38Page 39Page 40Page 412002-05Spring 2002 Optimization of Production and Distribution: Forecasting icity for Projected Growth Mark BaconMichael Breed 'IOptimization of Production and Distribution Forecasting Capacity for Projected Growth Mark Bacon, Michael greed 4 corner b a1cery-CAFE ROMflNO5. GRILLe JManagement Summary Brinker International currently owns numerous concepts including Corner Bakery, Maggiano's, and Macaroni Grill. The various stores suffer from a mom-and - pop mentality, relying on experience and intuition rather then quantitative data analysis. There is an opportunity to optimize process in an attempt to meet projected growth. Given the three-year growth projections for these three concepts, we have created a production and distribution model to analyze existing capacity and determine a need for future production capability. We created our model using an integer program. This allowed us to determine that Brinker cannot meet their projected growth under the current conditions. Additionally, running the models under various scenarios using maximum capacity constraints, Brinker is still unable to meet the projected growth. However, optimizing distribution and allowing plants to ship to other regions makes it possible to fill some capacity gaps and accommodate some growth.Optimization of Production and Distribution for Brinker International Mark BaconMichael BreedEMIS 4395 - Senior DesignMay 7, 2002Table of Contents Current Situation1 Problems with Current Situation1 Objectives2 Problem Formulation3 Technical Description of Model and Scenarios4 Results4 Conclusions/Recommendations5 Appendix A - Quantitative results spreadsheets Appendix B - AMPL Model Appendix C - Technical Description of ModelCurrent Situation Brinker International is a multi-billion dollar company, owning several concepts and hundreds of stores. Because of the process of acquiring concepts, the business operations of the various concepts tend to vary. The distributions, supply chain management, and production facilities all need to be linked and in-line .to maximize economies and profits. The individual stores tend to operate in a mom-and-pop store mentality relying on experience and intuition to estimate inventory needs and distribution routes. The three concepts we analyzed, Corner Bakery, Maggiano's, and Macaroni Grill, ship their goods from three major production plants located in Santa Ana, California, Dallas, and Chicago. Currently the stores are serviced by the plant closest to them. Although the processes may not be optimal at the most basic level, the company and its many concepts continue to thrive even in the weakened economy. Brinker has plans to continue growth into other regions of the country. Before this can happen though, the current situation and capacity for growth must be assessed to gain a better idea of the kind of investment it will take and how they can facilitate some growth by optimizing processes before the new facilities become ready for use. Analysis of the Situation The current system is simple and allows for the many stores to be serviced without much thought or planning. However, because of the varying production costs of the three plants as well as the varying costs of the distribution lines, there may be opportunity to optimize the distribution and production process and save money. The situation that is of the most concern to Brinker is the question of capacity for growth. The production plants are operating comfortably within their limits, and are having noproblem meeting the needs of the stores they service. However, with growth on the horizon, these capacities will be tested and it is of vital importance that we know the capacity capabilities before stores can be added. It is likely that some amount of investment will be involved to support the projected growth, but optimizing the process and distribution will allow them to support growth incrementally while the investment of equipment and facilities is being established. Looking at the possibility of shipping from any plant to satisfy capacity in any region will allow Brinker to use the current capacity to the fullest and make it easy to facilitate steady growth until increased production capacity is available.Objectives The first objective of the problem was to optimize the distribution routes to the various plants. This needs to be done in an attempt to utilize maximum existing capacities if the projected growth is to be met. From these results we will need to analyze the potential scenarios to see what is successful in increasing capacities. The results from the various scenarios will lend itself to cost benefit analysis to see what is the most cost effective way of attempting to meet the capacity demands of the projected growth. Finally we will be able to recommend any action that may need to be taken as well as where an investment needs to be made. Problem Formulation The formulation of the problem and gathering of the data was by far the most difficult and time-consuming part of the project. The pieces of data were often hard to find, needed to be estimated, or were a result of several other pieces of the data. Anunderstanding of the problem was gained through several meetings, and network sketches. The problem was divided into two basic parts, distribution and production. We had to establish arc costs between each feasible distribution route. Much of the complexity of the project was a result of the numerous distribution routes and their varying costs. To account for this we established a single arc cost between facilities by estimating the most probable distribution cost. Another part of the problem was the varying capacities, costs, and production capabilities of each plant. From the data we had gathered we were able to establish production capacities, shipping requirements, and production costs for each of the three concepts from each of the three plants. Production capacities were measured in terms of available resources to service the greatest number of concepts for one year. Shipping capacities were measured in total number of cases required to service one concept for one year. Production costs were easily


View Full Document

SMU EMIS 4395 - Optimization of Production and Distribution for Brinker International

Download Optimization of Production and Distribution for Brinker International
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Optimization of Production and Distribution for Brinker International and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Optimization of Production and Distribution for Brinker International 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?