Subject category:
Production and Operations Management
Published by:
INSEAD
Version: 03.2005
Length: 4 pages
Data source: Generalised experience
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Abstract
A meat processing and distribution company has ailing logistics. Management seeks to rationalise production and shipping decisions, which must be made daily, to ensure optimal utilisation of inhouse capabilitites, as well as outsourcing opportunities. Based on the case information, a linear optimisation model can be built to guide decision making. The case aims to: (1) illustrate the use of optimisation models to support efficient, timely decision making in a logistical system; (2) show the value added by such models in terms of increased net revenue; (3) illustrate the use and managerial value of sensitivity analysis on optimised solutions; and (4) demonstrate the relationship between systemwide optimisation of short-term, operational decisions and long-term, strategic value creation.
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Abstract
A meat processing and distribution company has ailing logistics. Management seeks to rationalise production and shipping decisions, which must be made daily, to ensure optimal utilisation of inhouse capabilitites, as well as outsourcing opportunities. Based on the case information, a linear optimisation model can be built to guide decision making. The case aims to: (1) illustrate the use of optimisation models to support efficient, timely decision making in a logistical system; (2) show the value added by such models in terms of increased net revenue; (3) illustrate the use and managerial value of sensitivity analysis on optimised solutions; and (4) demonstrate the relationship between systemwide optimisation of short-term, operational decisions and long-term, strategic value creation.