MBA Project: Optimization of Supply Routes for Consumer Goods

This project focuses on optimizing the process of forming supply routes for consumer goods within distribution centers to reduce costs and increase competitiveness. It investigates the application of logistics theory, including transport logistics, economic and mathematical methods, and information technology, to create a methodology for optimizing supply routes. The research aims to reduce enterprise costs by using a common platform of many spanning trees to manage the distribution of consumer goods during transportation. The project explores the potential of evolutionary metaheuristics to create a platform for solving various routing problems and applies the modeling theory proposed by Jeffrey Shapiro to determine variables for supply routes and create a mathematical model to maximize the total reward. The methodology includes identifying supply route variables, determining consumer satisfaction, and correlating these variables. The project also evaluates the effectiveness of the supply chain using key performance indicators and benchmarks. The goal is to shorten and make supply routes more effective, thereby reducing distribution costs. The study incorporates references to relevant research and methodologies to support its findings and recommendations.

Optimization of the process of forming supply routes for consumer goods in distribution centers
Student’s Name
Department
• To reduce non-production costs and increase the level of
competitiveness of organizations, continuous improvement of
the mechanisms for optimizing and managing logistics processes
is necessary. One of the promising areas of research in this area
is the optimization and management of the process of forming
routes in the supply chains of consumer goods (Koksharov,
2016).
• The research results of this direction are very relevant, first of
all, to improve the quality of functioning of the links supplying
and distributing in the supply chains of consumer goods.
Problem identification
• The proposal will focus on theory of logistics, including
transport logistics; economic and mathematical methods;
basics of information technology; models and methods of
operations research; main sections of the theory of graphs and
networks; methods for assessing economic efficiency.
• The aim of the work is to reduce enterprise costs by
optimizing and managing the process of forming supply
routes with rational distribution during transportation of
consumer goods in distribution centers on the basis of a
common platform of many spanning trees.
• The study will also attempt to propose a methodology for
optimizing and managing the process of forming supply
routes for consumer goods in distribution centers based on a
common platform of many spanning trees using basic models
and methods for solving optimization problems of transport
logistics and information technologies.
Potential for insightful outcomes
• Owing to the significance of shorter supply routes, the proposal
aims to explore ways to optimizing supply routes for consumer
goods by creating a common algorithmic platform based on
evolutionary metaheuristics using standard models and methods
for solving transport logistics problems that make up the
optimization core of a logistics information system (Sower and
Quarles 2007).
• The findings from the study would allow us create a common
platform for solving various types of routing problems: delivery
and collection and delivery; homogeneous and consolidated
cargoes, closed and open routes (Castillo-Villar, Smith and
Herbert-Acero, 2014).
• Existing theory that can be applied in optimization
of supply routes is the modelling theory proposed
by Jeffrey Shapiro.
• The theory will allow us to factor in different
supply routes variables and then come up with
mathematical model on which variables should be
considered by suppliers.
• The optimization of this model is to maximize the
total reward for including valid routes in the final
decision. (Freeman, 2008).
Application of theory
• into account when forming routes (Farahani and Elahipanah,
2008). The conducted example of using a unified methodology for
optimizing routes in the supply chains of goods allows us to draw
the following conclusions. Firstly, the optimization algorithm
proposed by Professor Shapiro really allows you to improve the
solution found using heuristics.
• Secondly, this solution can only be improved if additional routes,
also found using heuristics, are included in the linear programming
model. Thirdly, there are not so many options for choosing
additional routes due to the fact that various restrictions must be
taken
Method of analysis
Scope, aim and objectives
Evidence
• Evaluation of the effectiveness of the supply chain
should be carried out by a set of indicators (metrics)
that give a comprehensive idea of the impact of
performance in various business processes on the
final strategic financial indicators.
• A comparison of indicators achieved in the supply
chain with benchmarks in this sector of the
economy reveals ways to improve the functioning
of the supply chain as a whole and its individual
elements in particular.
• The use of transport metrics allows us to evaluate
the efficiency of the use of vehicles in the supply
chain and the impact of transport service
technologies on key performance indicators of the
supply chain.
Product
Shorter
supply
routes
Cheaper
price
Product
Longer
supply
chain
Expensive
price
• Currently, the length and quality of supply chain routes for
consumer products is determining factor in the final price. The
shorter and effective the supply routes, the lower the distribution
cost and the cheaper the product.
• Unfortunately, most of the supply routes for consumer goods are
long, which causes inconveniencies not only to suppliers but
also to consumers
Rationale
Methodological approach
• The first step is to identify supply routes variables.
• The second step is to determine the consumer
satisfaction .
• The third step is to do correlation on the variables
identified and consumer satisfaction (Freeman,
2008).

References
Castillo-Villar, K.K., Smith, N.R. and Herbert-Acero, J.F. (2014). Design and Optimization of Capacitated Supply Chain Networks Including Quality
Measures. Mathematical Problems in Engineering, 2014, Article ID: 218913. http://dx.doi.org/10.1155/2014/218913
Douiri, L., Jabri, A. & Barkany, A. (2016). Models for Optimization of Supply Chain Network Design Integrating the Cost of Quality: A Literature Review.
American Journal of Industrial and Business Management, 2016, 6, 860-876.
Koksharov, V. (2016). Supply Chain Modelling. A Practical Approach. Retrieved from:
https://www.theseus.fi/bitstream/handle/10024/118284/Koksharov_Vladislav.pdf;jsessionid=A7ED1B13F095E5074E55C050E85C72C7?sequence=1
Hill, C. & Jones, G. (2010). Strategic Management Theory. An integrated approach. 9th Edition. Available from:
http://www.made-in-china.com/products-search/hotchina-products/Shipping_To_Finland.html
SCM Globe (2014). Online Supply Chain Design & Simulation: Five Supply Chain Drivers. Accessed from: http://blog.scmglobe.com/?p=422
Sower, V.E. and Quarles, R. (2007) Cost of Quality Usage and Its Relationship to Quality System Maturity. International Journal of Quality & Reliability
Management, Vol. 24, pp: 121-140
Farahani, R.Z. and Elahipanah, M. (2008) A Genetic Algorithm to Optimize the Total Cost and Service Level for Just-in-Time Distribution in a Supply Chain.
International Journal of Production Economics, Vol. 111, pp: 229-243.