Equitable Distribution of Cars from Plants to Retailers
Our company partnered with an IT solution provider to develop an optimization model to solve the distribution problem. As the first step, we developed an in-depth understanding of the business problem to be solved, documenting its decision variables, constraints and objective function terms. After we performed data analysis of the input data, we used the insights that the data provided to select the right optimization approach.
We developed an iterative solution approach to solve the distribution problem, solving a sequence of mixed integer programming (MIP) problems while improving retailers’ satisfaction in each iteration. We tested this approach on multiple data sets to assess the robustness of the solution quality. The results: We demonstrated considerable improvement in the equitable distribution of cars to dealers.
- Replaced a manual process with an automated process for manufacturers that was objective and user preference-driven.
- Dealers received car models that were more aligned with customer needs, which resulted in higher sales.