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Supply-Chain Analysis at Volkswagen of America

Author

Listed:
  • Nejat Karabakal

    (IBM Supply- Chain Optimization Practice, 2405 Bunker Hill, Ann Arbor, Michigan 48105)

  • Ali Günal

    (Production Modeling Corporation, Three Parklane Boulevard, Dearborn, Michigan 48126)

  • Warren Ritchie

    (Volkswagen of America, 3800 Hamlin Road, Auburn Hills, Michigan 48326)

Abstract

In 1995, Volkswagen of America began a review of its vehicle-distribution system looking for opportunities to improve customer responsiveness and simultaneously reduce system costs. An analytical tool was required to evaluate alternative designs in terms of cost and customer service level, both of which are functions of probabilistic and dynamic elements. These elements include inventory policies, demand seasonality and volume, customer-choice patterns, and transportation delays. By using an innovative combination of simulation and discrete optimization models, we addressed the problem of analyzing a large number of alternatives efficiently. Our analysis indicated opportunities for significant savings in estimated annual transportation costs, and it provided insights on how to implement the proposed system.

Suggested Citation

  • Nejat Karabakal & Ali Günal & Warren Ritchie, 2000. "Supply-Chain Analysis at Volkswagen of America," Interfaces, INFORMS, vol. 30(4), pages 46-55, August.
    • Handle: RePEc:inm:orinte:v:30:y:2000:i:4:p:46-55
    DOI: 10.1287/inte.30.4.46.11648
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    Citations

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    Cited by:

    1. Sima M. Fortsch & Jeong Hoon Choi & Elena A. Khapalova, 2022. "Competition can help predict sales," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(2), pages 331-344, March.
    2. Alper Şen & Deepak Bhatia & Koray Doğan, 2010. "Applied Materials Uses Operations Research to Design Its Service and Parts Network," Interfaces, INFORMS, vol. 40(4), pages 253-266, August.
    3. James R. Kroes & Yuwen Chen & Paul Mangiameli, 2013. "Estimating Demand for Container Freight Service at the Port of Davisville," Interfaces, INFORMS, vol. 43(2), pages 170-181, April.
    4. Larry J. LeBlanc & James A. Hill & Gregory W. Greenwell & Alexandre O. Czesnat, 2004. "Nu-kote’s Spreadsheet Linear-Programming Models for Optimizing Transportation," Interfaces, INFORMS, vol. 34(2), pages 139-146, April.
    5. Moritz Julius Ziegler & Kilian Seifried & Philipp Kuske & Moritz Fleischmann, 2019. "TRUMPF Uses a Mixed Integer Model as Decision Support for Strategic Production Network Design," Interfaces, INFORMS, vol. 49(3), pages 213-226, May.

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