Quantitative Management Consulting Project-Apple Valley's Bakery
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The purpose of this project is to use linear programming to help the organization in making the decision of how to display their product in order to reach maximum profit.
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Quantitative Management Consulting Project-Apple Valley's Bakery
- 1. Final Consulting Project Apple Valley’s Bakery BSAD-643 Quantitative Methods for Business Decisions Yu-Wen Huang
- 2. Apple Valley Natural Foods A full-service natural foods store
- 3. Case Description Goal: Determine the best use of the shelf space and refrigerator space for bakery products.
- 4. Case Description Current Situation: ⬗ 25 square feet of shelf space ⬗ 10 square feet of refrigerator space ⬗ Total production time available is 2880 minutes per day ⬗ Four product categories: Breads, Cakes, Pies, and Donuts
- 5. Breads 1. White Toast 2. Whole Wheat Toast 3. French stick 4. Bagel 5. Banana bread 6. Croissant
- 6. Cakes 1. Banana Cake 2. Chocolate Cake 3. Black Forest Cake 4. Brownie 5. Cheese Cake
- 7. Pies 1. Boston cream pie 2. Blueberry pie 3. Apple pie 4. Buttermilk pie 5. Cheese pie
- 8. Donuts 1. Chocolate Donuts 2. Strawberry Donuts 3. Cinnamon Donuts 4. Oreo Donuts 5. Glazed Donuts 6. Coffee Donuts 7. Vanilla Donuts 8. Lemon Donuts 9. Doughnut Holes (4 in one bag) 10. Cinnamon Bun
- 10. Case Description Constraints: 1. At least 7 square feet of the space to the breads 2. At least 5 square feet of pies 3. At least 3 square feet of donuts 4. The amount of toast should be 1/3 of all kind of breads 5. Boston Cream pie should not be less than other kinds of pie 6. The amount of doughnut holes and cinnamon buns should be at least 1/4 of all kind of donuts 7. At least 80% of the space of refrigerator must be used 8. At least two units of each kind of products
- 11. Problem Definition How many units of breads, cakes, pies and donuts should the bakery produce in order to maximize its profit and to use the shelf’s space most efficiently?
- 12. Purpose & Sig To help companies efficiently use the space in their retail stores, determine the display of different products and at the same time reach the goal of profit maximization.
- 13. SYNTAX & Result
- 14. 1. Production Time Available: 2880 Production Time Used: 2790 Slack: 90 minutes 2. Shelf Space Available: 25 Shelf Space Used: 22.18 Slack: 2.82 square feet Slacks
- 15. Implication & Recommendations 1. Decreasing the shelf space of bakery product and allow other products to use the slack spaces. 2. Developing new products to use the slack shelf space since they still have 90 minutes of production time that are unused. 3. Decreasing the cost or increase the selling price of unprofitable products to reach higher profits.
- 16. Thank you
Editor's Notes
- The goal of my project is to determine the best use of the shelf space and refrigerator space for bakery products.
- The manager is going to expand its shelf space to 25 square feet They have 10 square feet of refrigerator space There are six bakery workers, average working hours for each person is eight hours per day, so the total production time available per day is 48 hours (2880 minutes). Four product categories: Breads, Cakes, Pies, and Donuts
- The primary bakery products are breads, so the manager wants to allocate at least 7 square feet of the space to the breads, regardless of the profitability. For pies and donuts, the manager is thinking to have at least 5 square feet of pie, and at least 3 square feet of donuts. Besides, the amount of toast should be one third of all kind of breads because those are the best sellers. Boston Cream pie should not be less than other kinds of pie, because it is the most profitable pie. The amount of doughnut holes and cinnamon buns should at least be one fourth of all kind of donuts because these are their new products. At least 80% of the space of refrigerator must be used. Finally, the manager requires the bakery to make and display at least two units of each kind of products.
- One of the problem that every retail stores have is how to display the products. The purpose of the problem is to help companies efficiently use the space in their retail stores, determine the display of different products and at the same time reach the goal of profit maximization. In addition, in consideration of the need that managers might want new products, high-profit products, and best sellers to be displayed more than other products, the problem is design to meet all of the considerations.