IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v43y2013i3p209-220.html
   My bibliography  Save this article

Embotelladoras ARCA Uses Operations Research to Improve Territory Design Plans

Author

Listed:
  • J. Fabián López-Pérez

    (Universidad Autónoma de Nuevo León (UANL), San Nicolás de los Garza, NL 66450, Mexico)

  • Roger Z. Ríos-Mercado

    (Universidad Autónoma de Nuevo León (UANL), San Nicolás de los Garza, NL 66450, Mexico)

Abstract

Embotelladoras ARCA is a Mexican company dedicated to the production, distribution, and sales of soft drink brands owned by the Coca-Cola Company, ARCA, and third parties. One of the most relevant problems the company faces is how to segment its customers into territories to accommodate the most efficient handling of marketing and distribution decisions. This territory design must also satisfy several planning requirements, such as territory compactness, connectivity, and balancing, and similarity with the existing design. Before 2009, the company planners defined these units based on their experiences, without using quantitative tools, giving more weight to the territory compactness criterion. This method of definition led to a number of undesirable issues, including highly unbalanced territories; that is, the final plans had large disparities in size with respect to both number of customers and total product demand. In this paper, we apply operations research methods to determine configurations of the territorial units that ensure territory balance with respect to both number of customers and total product demand, while complying with other important planning requirements and maximizing territory compactness. Using this methodology has resulted in significant enhancements with respect to the territory imbalance issue while maintaining the level of territory compactness. We also highlight additional benefits of this approach. Embotelladoras ARCA has adopted this proposed tool to make its design decisions.

Suggested Citation

  • J. Fabián López-Pérez & Roger Z. Ríos-Mercado, 2013. "Embotelladoras ARCA Uses Operations Research to Improve Territory Design Plans," Interfaces, INFORMS, vol. 43(3), pages 209-220, May-June.
  • Handle: RePEc:inm:orinte:v:43:y:2013:i:3:p:209-220
    DOI: 10.1287/inte.1120.0675
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.1120.0675
    Download Restriction: no

    File URL: https://libkey.io/10.1287/inte.1120.0675?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. Juan Carlos Duque & Raúl Ramos & Jordi Suriñach, 2007. "Supervised Regionalization Methods: A Survey," International Regional Science Review, , vol. 30(3), pages 195-220, July.
    2. María Salazar-Aguilar & Roger Ríos-Mercado & Mauricio Cabrera-Ríos, 2011. "New Models for Commercial Territory Design," Networks and Spatial Economics, Springer, vol. 11(3), pages 487-507, September.
    3. Andris A. Zoltners & Prabhakant Sinha, 2005. "The 2004 ISMS Practice Prize Winner—Sales Territory Design: Thirty Years of Modeling and Implementation," Marketing Science, INFORMS, vol. 24(3), pages 313-331, September.
    4. M. Salazar-Aguilar & Roger Ríos-Mercado & José González-Velarde & Julián Molina, 2012. "Multiobjective scatter search for a commercial territory design problem," Annals of Operations Research, Springer, vol. 199(1), pages 343-360, October.
    5. Andris A. Zoltners & Prabhakant Sinha, 1983. "Sales Territory Alignment: A Review and Model," Management Science, INFORMS, vol. 29(11), pages 1237-1256, November.
    Full references (including those not matched with items on IDEAS)

    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. Sebastián Moreno & Jordi Pereira & Wilfredo Yushimito, 2020. "A hybrid K-means and integer programming method for commercial territory design: a case study in meat distribution," Annals of Operations Research, Springer, vol. 286(1), pages 87-117, March.
    2. Sandoval, M. Gabriela & Álvarez-Miranda, Eduardo & Pereira, Jordi & Ríos-Mercado, Roger Z. & Díaz, Juan A., 2022. "A novel districting design approach for on-time last-mile delivery: An application on an express postal company," Omega, Elsevier, vol. 113(C).
    3. Bender, Matthias & Meyer, Anne & Kalcsics, Jörg & Nickel, Stefan, 2016. "The multi-period service territory design problem – An introduction, a model and a heuristic approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 96(C), pages 135-157.
    4. R. Church & J. C. Duque & D. E. Restrepo, 2020. "The p-Innovation ecosystems model," Papers 2008.05885, arXiv.org.
    5. Ríos-Mercado, Roger Z. & López-Pérez, J. Fabián, 2013. "Commercial territory design planning with realignment and disjoint assignment requirements," Omega, Elsevier, vol. 41(3), pages 525-535.
    6. Hyun Kim & Yongwan Chun & Kamyoung Kim, 2015. "Delimitation of Functional Regions Using a p-Regions Problem Approach," International Regional Science Review, , vol. 38(3), pages 235-263, July.
    7. Han, Jialin & Hu, Yaoguang & Mao, Mingsong & Wan, Shuping, 2020. "A multi-objective districting problem applied to agricultural machinery maintenance service network," European Journal of Operational Research, Elsevier, vol. 287(3), pages 1120-1130.
    8. Ríos-Mercado, Roger Z. & Bard, Jonathan F., 2019. "An exact algorithm for designing optimal districts in the collection of waste electric and electronic equipment through an improved reformulation," European Journal of Operational Research, Elsevier, vol. 276(1), pages 259-271.
    9. M. Salazar-Aguilar & Roger Ríos-Mercado & José González-Velarde & Julián Molina, 2012. "Multiobjective scatter search for a commercial territory design problem," Annals of Operations Research, Springer, vol. 199(1), pages 343-360, October.
    10. Alexandre Xavier Ywata Carvalho & Pedro Henrique Melo Albuquerque & Gilberto Rezende de Almeida Junior & Rafael Dantas Guimarães & Camilo Rey Laureto, 2009. "Clusterização Hierárquica Espacial com Atributos Binários," Discussion Papers 1428, Instituto de Pesquisa Econômica Aplicada - IPEA.
    11. Verónica Arredondo & Miguel Martínez-Panero & Teresa Peña & Federica Ricca, 2021. "Mathematical political districting taking care of minority groups," Annals of Operations Research, Springer, vol. 305(1), pages 375-402, October.
    12. Juan Jiménez & Jordi Perdiguero, 2012. "Does Rigidity of Prices Hide Collusion?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 41(3), pages 223-248, November.
    13. Drexl, Andreas & Haase, Knut, 1996. "Fast approximation methods for sales force deployment," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 411, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    14. Lingxia Wang & Zhongwu Li & Danyang Wang & Xiaoqian Hu & Ke Ning, 2020. "Self-Organizing Map Network-Based Soil and Water Conservation Partitioning for Small Watersheds: Case Study Conducted in Xiaoyang Watershed, China," Sustainability, MDPI, vol. 12(5), pages 1-17, March.
    15. Manuela Alcañiz & Montserrat Guillén & Daniel Sánchez-Moscona & Miguel Santolino & Oscar Llatje & Lluís Ramon, 2013. "Prevalence of alcohol-impaired drivers based on random breath tests in a roadside survey," Working Papers XREAP2013-05, Xarxa de Referència en Economia Aplicada (XREAP), revised Jul 2013.
    16. Jania Astrid Saucedo Martinez & Abraham Mendoza & Maria del Rosario Alvarado Vazquez, 2019. "Collection of Solid Waste in Municipal Areas: Urban Logistics," Sustainability, MDPI, vol. 11(19), pages 1-15, October.
    17. Calzada, Joan & Martínez-Santos, Fernando, 2014. "Broadband prices in the European Union: Competition and commercial strategies," Information Economics and Policy, Elsevier, vol. 27(C), pages 24-38.
    18. Taylor M. Oshan & Levi J. Wolf & Mehak Sachdeva & Sarah Bardin & A. Stewart Fotheringham, 2022. "A scoping review on the multiplicity of scale in spatial analysis," Journal of Geographical Systems, Springer, vol. 24(3), pages 293-324, July.
    19. Yao, Ming-Jong & Lin, Jen-Yen & Lin, Yu-Liang & Fang, Shu-Cherng, 2020. "An integrated algorithm for solving multi-customer joint replenishment problem with districting consideration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 138(C).
    20. Rui Fragoso & Conceição Rego & Vladimir Bushenkov, 2016. "Clustering of Territorial Areas: A Multi-Criteria Districting Problem," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 14(2), pages 179-198, December.

    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:43:y:2013:i:3:p:209-220. 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.