Feasibility study for the implementation of a logistics network for distribution of dry food to low income people
Name
50573767-MIT.pdf
Description
Full printable version
Size
7.37 MB
Format
Adobe PDF
Checksum (MD5)
3dc99d6b65d6631bd5b82d834789a9a6
Author(s)
Martinez, Raimundo, 1971-
Advisor(s)
Yossi Sheffi.
Date Issued
2002
Publisher
Massachusetts Institute of Technology
Abstract
This study explores the feasibility of reducing the purchasing costs of dry food by improving current logistic channels and aggregating demand. The value proposition is to reduce the purchase cost of dry food by 20% by setting up a logistic model to connect end customers with food manufacturers through a central coordination operation. This coordination unit will manage supply and demand using the Internet and a "cross-docking" system. Chile was chosen to evaluate the feasibility of a pilot project to test the model, in particular the capital city of Santiago and southern regions of the country. Results show that the proposed model is economically and technically viable if located in regional areas outside Santiago where there is a high density of low-income communities and no large chains of supermarkets. The project's return on investment is 18.5%, based on a 5-year period, a 15% discount rate, and CH$87 million of initial investment. Results of the urban model for Santiago demonstrate that it is not economically feasible due to the low-density market potential and high supermarket penetration rate. The financial model for rural areas shows that, even though transportation costs are higher than in urban Santiago, it is economically feasible and only 26 sites are required to make the project break even, representing 9% market penetration.
Description
Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2002.
Includes bibliographical references (p. 69-70).
Subjects
Civil and Environmental Engineering.
MIT Department
Massachusetts Institute of Technology. Department of Civil and Environmental Engineering
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