A method for analyzing the delivery frequency from a distribution center to a retail grocery store

Abstract

Currently, no adequate method exists for determining how frequently a retail store in a supermarket chain should receive deliveries from its distribution center. Existing methods neglect many crucial constraints, such as the necessity for deliveries to fall on fixed days of the week, severely limited shelf space, and the inability for many stores to hold additional overstock product in a backroom. This paper addresses the problem by outlining a new method for determining the delivery frequency by developing a simulation model for the replenishment process of a supermarket chain. The model can also be used to provide insight into other aspects of the replenishment process, such as shelf space allocation, and reorder rules. Using this model, we were able to show that significant cost savings were available to the supermarket chain we worked with on the project by changing the delivery schedules for their stores.