The Kellogg Company Optimizes Production, Inventory, and Distribution
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Authors
Brown, Gerald G.
Keegan, Joseph
Vigus, Brian
Wood, R. Kevin
Subjects
Advisors
Date of Issue
2001
Date
November - December 2001
Publisher
Language
Abstract
For over a decade, the Kellogg Company has used its planning
system (KPS), a large-scale, multiperiod linear program, to
guide production and distribution decisions for its cereal and
convenience foods business. An operational version of KPS, at
a weekly level of detail, helps determine where products are
produced and how finished products and in-process products
are shipped between plants and distribution centers. A tactical
version of KPS, at a monthly level of detail, helps to establish
plant budgets and make capacity-expansion and consolidation
decisions. Operational KPS reduced production, inventory, and distribution costs by an estimated $4.5 million in 1995. Tactical KPS recently guided a consolidation of production capacity with a projected savings of $35 to $40 million per year.
Type
Article
Description
Interfaces, 31, pp. 1-15.
Series/Report No
Department
Operations Research (OR)
Organization
Identifiers
NPS Report Number
Sponsors
Funder
Format
Citation
Brown, G.G., Keegan, J., Vigus, B., and Wood, R.K., 2001, “The Kellogg Company Optimizes Production, Inventory, and Distribution,” Interfaces, 31, pp. 1-15.
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defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.