The Kellogg Company Optimizes Production, Inventory, and Distribution
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Author
Brown, Gerald G.
Keegan, Joseph
Vigus, Brian
Wood, R. Kevin
Date
2001Metadata
Show full item recordAbstract
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.
Description
Interfaces, 31, pp. 1-15.
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