Description

Woolworths NZ operates the Countdown, FreshChoice and SuperValue supermarket chains in New Zealand. Each store needs to receive goods daily to ensure their shelves are fully stocked. They operate a fleet of 30 trucks in order to move these goods from their distribution centre in Favona to their stores around Auckland.
On each day, each store receives pallets of goods from a distribution centre based on historical data on sales. Therefore, the number of pallets shipped to each store differs each day. For this model, we will work in units of pallets, and we will not differentiate between different product categories.
On days where there are not sufficient trucks to satisfy all demand, either because of a shortage of truck time or an excess in store demand for pallets, additional trucks can be ‘wet-leased’ (vehicle rental that includes a driver) from Daily Freight for a cost of $2000 for every four hours of on-duty time, charged in four-hour blocks.
Woolworths NZ would like to determine a suitable truck logistics plan such that costs are minimised. They have provided you with:
• the number of pallets delivered to each store they operate over a 4 week period (pre-lockdown),
• the GPS coordinates of each store and the distribution centre,
• the road distance (in meters) and travel durations (in seconds) between each pair of stores and distribution points.
Part I
1. Analyse the data provided to develop an appropriate estimate of the number of pallets required at each store on each day which can be used in your optimisation model.
2. Using the pallet estimates, create a set of feasible trucking routes that satisfy the requirements given.
3. Formulate and solve a mixed-integer program to find the least-cost routing schedule for the truck fleet, using the demand estimates from part 1.
Part II
4. Create visualisation(s) of your proposed trucking routes, suitable for presentation to management.
5. Evaluate the quality of your schedule by creating a simulation to estimate the actual cost of satisfying actual pallet demand at every store. Your simulation should take into variations in demand and sensibly approximate the effect of traffic. Hence, give an estimate of the cost of operating your proposed routing schedule, with and without the Northern distribution centre.
6. Identify stores that could be closed under the proposal, and evaluate how the resulting cost changes affects the performance of your proposed trucking schedule. Consider also the wider implications on the systems and people that interact with the Countdown/FreshChoice/SuperValue stores and this truck logistics plan.
7. What are your recommendations to Woolworths NZ after conducting this study?
Note: this project does not have just one correct answer!
Deliverables
Group Model Report (5%)
Your group should submit a document that addresses Part I of the project description. This document should focus on your modelling and analysis of the problem and the assumptions made in formulating your model. It should be no longer than 5 × A4 sides. The document does not need to be in a formal report form (i.e.
introduction / conclusions are not required). Appropriate visualisations are expected.
Like the CM project, your group should use Bitbucket to store the code developed for this project.
In your group, produce appropriate visualisation(s) of:
• proposed trucking routes
• simulation results in terms of cost of operation or other relevant metrics.
Interpret your visualisations and make appropriate comments. Submit this as a PDF document to Canvas. These do not have to be your final results!
Individual Report (12%)
The report must be in an engineering-report format suitable for presentation to management (who have a good OR / Analytics expert on their team, so some technical language can be used).
The report should be no more than 6 × A4 sides (12pt Times New Roman, or similar) from introduction to conclusions, i.e. not including front-matter (cover/title page, table of contents, executive summary etc.) and back-matter (appendices, references, bibliography etc.).
In your report you need to describe your group’s overall approach to solving this problem (using the pronoun “we”); however, emphasise your contribution to the project using the pronoun “I”.
Contribution Summary and Reflection (0.5%)
As with the Computational Mechanics project, marks in the project will be reduced by up to 75% depending on the degree of non-participation.
Notes: