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Safeway Designs Mixed-Product Pallets to Support Just-in-Time Deliveries

Author

Listed:
  • John Chao

    (Action Properties, 688 W. Dana St., Mountain View, California 94041)

  • Matty Chen

    (Accenture, Inc., 1661 Page Mill Road, Palo Alto, California 94304)

  • Aileen Deng

    (Rui Feng/Ultrarich Trading, Ltd., Cosco Tower, 183 Queen’s Road, Central, Hong Kong)

  • Harold Miao

    (Standard & Poor’s, 2000 University Circle, Suite 600, East Palo Alto, California 94303)

  • Alexandra Newman

    (Division of Economics and Business, Colorado School of Mines, Golden, Colorado 80401)

  • Sophia Tseng

    (Oracle Corporation, 100 Oracle Parkway, Redwood Shores, California 94065)

  • Candace Arai Yano

    (Department of Industrial Engineering and Operations Research and the Haas School of Business, University of California, Berkeley, Berkeley, California 94720)

Abstract

In 1998, Safeway milk plants began daily deliveries to most stores, doubling their delivery frequency. The new schedule increased the workloads for assembling orders at the milk plant by 20 percent because, under the new system, very few store orders called for full pallets of a single product, and store-specific mixed pallets were time consuming to assemble. To reduce the excess workload, we designed two types of standard mixed pallets that, in quantities of one to three, could satisfy part of the demands of many stores on most days, thereby reducing the need for store-specific mixed pallets. Our mathematical model optimizes the design of the standard mixed-product pallets. These mixed-product pallets can be assembled prior to the peak shipping periods and during other off-peak times to ease peak workloads and eliminate excessive overtime. Safeway implemented the solution without our assistance and continues to use it nearly five years after implementation with good results.

Suggested Citation

  • John Chao & Matty Chen & Aileen Deng & Harold Miao & Alexandra Newman & Sophia Tseng & Candace Arai Yano, 2005. "Safeway Designs Mixed-Product Pallets to Support Just-in-Time Deliveries," Interfaces, INFORMS, vol. 35(4), pages 294-307, August.
    • Handle: RePEc:inm:orinte:v:35:y:2005:i:4:p:294-307
    DOI: 10.1287/inte.1050.0144
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    References listed on IDEAS

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    Cited by:

    1. Agrawal, Narendra & Smith, Stephen A., 2019. "Optimal inventory management using retail prepacks," European Journal of Operational Research, Elsevier, vol. 274(2), pages 531-544.

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