IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v28y1998i5p13-24.html
   My bibliography  Save this article

Raw Material Management at Welch's, Inc

Author

Listed:
  • Edmund W. Schuster

    (Welch's, Inc., 555 Virginia Road, Concord, Massachusetts 01742)

  • Stuart J. Allen

    (School of Business, Penn State-Erie, The Behrend College, Erie, Pennsylvania 16563)

Abstract

Welch's, a large grape-processing company owned by a grower cooperative, faced complex logistics in planning recipes for products sold in retail stores. The recently installed integrated MRP and cost-accounting systems did not include ways to calculate recipes at optimal cost based on plant-raw-material and capacity constraints. An imbalance of supply and demand further complicated this problem in raw-materials management. The cross-functional team in charge of managing raw materials spent increasing amounts of time deciding what recipes to use at each plant. We formulated the problem as a linear program model and used spreadsheet optimization to incorporate the model in daily decision making. The company has run the model each month since 1994 to provide senior management with information on the optimal logistics plan. This simple application saved Welch's between $130,000 to $170,000 during the first year.

Suggested Citation

  • Edmund W. Schuster & Stuart J. Allen, 1998. "Raw Material Management at Welch's, Inc," Interfaces, INFORMS, vol. 28(5), pages 13-24, October.
    • Handle: RePEc:inm:orinte:v:28:y:1998:i:5:p:13-24
    DOI: 10.1287/inte.28.5.13
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.28.5.13
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.28.5.13?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Wayne L. Winston, 1996. "The Teachers' Forum: Management Science with Spreadsheets for MBAs at Indiana University," Interfaces, INFORMS, vol. 26(2), pages 105-111, April.
    2. Matthew J. Liberatore & Tan Miller, 1985. "A Hierarchical Production Planning System," Interfaces, INFORMS, vol. 15(4), pages 1-11, August.
    3. Renato de Matta & Tan Miller, 1993. "A Note on the Growth of a Production Planning System: A Case Study in Evolution," Interfaces, INFORMS, vol. 23(4), pages 116-122, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wenbo Zhang & Wilbert Wilhelm, 2011. "OR/MS decision support models for the specialty crops industry: a literature review," Annals of Operations Research, Springer, vol. 190(1), pages 131-148, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vicens, E. & Alemany, M. E. & Andres, C. & Guarch, J. J., 2001. "A design and application methodology for hierarchical production planning decision support systems in an enterprise integration context," International Journal of Production Economics, Elsevier, vol. 74(1-3), pages 5-20, December.
    2. John F. Raffensperger, 2003. "New Guidelines for Spreadsheets," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 2(2), pages 141-154, August.
    3. John Miltenburg, 2019. "Online Teaching in a Large, Required, Undergraduate Management Science Course," INFORMS Transactions on Education, INFORMS, vol. 19(2), pages 89-104, January.
    4. Karina Copil & Martin Wörbelauer & Herbert Meyr & Horst Tempelmeier, 2017. "Simultaneous lotsizing and scheduling problems: a classification and review of models," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(1), pages 1-64, January.
    5. Beraudy, Sébastien & Absi, Nabil & Dauzère-Pérès, Stéphane, 2022. "Timed route approaches for large multi-product multi-step capacitated production planning problems," European Journal of Operational Research, Elsevier, vol. 300(2), pages 602-614.
    6. Ozdamar, Linet & Birbil, Sevket Ilker, 1999. "A hierarchical planning system for energy intensive production environments," International Journal of Production Economics, Elsevier, vol. 58(2), pages 115-129, January.
    7. Xue, Guisen & Felix Offodile, O. & Zhou, Hong & Troutt, Marvin D., 2011. "Integrated production planning with sequence-dependent family setup times," International Journal of Production Economics, Elsevier, vol. 131(2), pages 674-681, June.
    8. Jans, R.F. & Degraeve, Z., 2005. "Modeling Industrial Lot Sizing Problems: A Review," ERIM Report Series Research in Management ERS-2005-049-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    9. Stephen G. Powell, 1998. "The Teachers' Forum: Requiem for the Management Science Course?," Interfaces, INFORMS, vol. 28(2), pages 111-117, April.
    10. Stewart Robinson & Maureen Meadows & John Mingers & Frances A. O'Brien & Estelle A. Shale & Stephanie Stray, 2003. "Teaching OR/MS to MBAs at Warwick Business School: A Turnaround Story," Interfaces, INFORMS, vol. 33(2), pages 67-76, April.
    11. Peter J. Regan, 2006. "Professional Decision Modeling: Practitioner as Professor," Interfaces, INFORMS, vol. 36(2), pages 142-149, April.
    12. Tan Miller & Emmanuel Peters & Vijay Gupta & Oduntan Bode, 2013. "A logistics deployment decision support system at Pfizer," Annals of Operations Research, Springer, vol. 203(1), pages 81-99, March.
    13. Vijay Gupta & Emmanuel Peters & Tan Miller & Kelvin Blyden, 2002. "Implementing a Distribution-Network Decision-Support System at Pfizer/Warner-Lambert," Interfaces, INFORMS, vol. 32(4), pages 28-45, August.
    14. Kala Chand Seal & Zbigniew H. Przasnyski, 2003. "Using Technology to Support Pedagogy in an OR/MS Course," Interfaces, INFORMS, vol. 33(4), pages 27-40, August.
    15. Ozdamar, Linet & Bozyel, M. Ali & Birbil, S. Ilker, 1998. "A hierarchical decision support system for production planning (with case study)," European Journal of Operational Research, Elsevier, vol. 104(3), pages 403-422, February.
    16. H. Brian Hwarng, 2001. "A Modern Simulation Course for Business Students," Interfaces, INFORMS, vol. 31(3), pages 66-75, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:28:y:1998:i:5:p:13-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.