The Kellogg Company Optimizes Production, Inventory, and Distribution

Gerald Brown (), Joseph Keegan (), Brian Vigus () and Kevin Wood ()
Additional contact information
Gerald Brown: Operations Research Department, Naval Postgraduate School, Monterey, California 93943
Joseph Keegan: Kellogg Company, P.O. Box 3599, Battle Creek, Michigan 49017-3599
Brian Vigus: Kellogg Company, P.O. Box 3423, Battle Creek, Michigan 49016-3423
Kevin Wood: Operations Research Department, Naval Postgraduate School

Interfaces, 2001, vol. 31, issue 6, 1-15

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.

Keywords: INDUSTRIES—AGRICULTURE; FOOD; PROGRAMMING—LINEAR; APPLICATIONS (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (40)

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