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LCDR Vikas Jasuja USN

Capt. Roque Graciani USMC

TOP ONES 26

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OverviewPURPOSE: Analyze Logistical Network of Top Ones 26

• Background of Top Ones 26• Display abstract, specifically arcs, nodes• Incorporate cost analysis into the model• Model (GAMS) formulation• Management philosophy 1 – assume ownership’s primary

goal is profit• Management philosophy 2 – ensure all products are stocked• Conclusions• Further Work

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What is Top Ones 26?

Founding Principles:• Mission Statement: per Jamal Sampson “is to create an

establishment satisfy the customer’s desire of alcoholic beverages of the highest quality, including micro-brews, craft beers, fine wines, and spirits produced in the United States of America and Canada”

• Is a bar for those who “know their drinks”, i.e beer, wine, and whiskey connoisseurs. Not a cookie cutter establishment!

• Variety is key , i.e. while Napa Valley is a power player in the wine industry only one wine will be represented at a time.

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Beer Selection

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BREWERIESBrewery Locations

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Winery Locations

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Distilleries

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Top Ones 26 Bartenders

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Top Ones 26 Bartenders

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Top One’s 26 Bars

Top One’s 26 Bar Locations

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Warehouse Locations

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Top Ones 26 Logistical Means

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Network Model Flow

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Connecting Nodes and Edges

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Shipping Lanes Example

Sam Adams Brewery

Dallas WarehouseDallas Bar

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Model Assumptions

-Bars only have capacity for 26 shipments.-Trucks have 22 pallets of product capacity.-Prices for like commodities are equal.-Vendors are off limits to network attacks.-Transportation costs are constant.-60 cases of beer per pallet.-48 cases of wine per pallet.-100 cases of whiskey per pallet.

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Cost and Profit BreakdownProduct Price per

CaseLogisticalNetwork

Price per mile

Profit Margin

Scaling Factor

Beer $30

TOP ONES $1.50 50% 10Wine $150

Whiskey $150

IF OTHER LOGISTICAL NETWORK IS USED THERE IS A 20 PCT INCREASE IN COSTS AND SMALLER RETURN

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Management Philosophy 1

-Unprotected network, no safe havens.-Using negative costs to drive model.-Profit first approach.-Attack and let’s see what happens…

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Possible Attacks

LIKELIHOOD

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Min-Cost Multi-Commodity Flow

GAMS/CPLEX

26 Commodities 62 Nodes 2133 Edges Costs Capacities Revenue Streams

Max-Profit

Best Attacks

Stocking Levels

Network Insight

Gams Implementation of Model

2c 3c 4c

Profit made through warehouse supply chainCost from purchasing straight from vendorProfit from purchasing straight from vendor

1( ,0,3)c2( ,0, 26)c

(0,0,78)

(0,0,1)

3( ,0,1)c

4( ,0,13)c

(0,0,104)5( ,0,100)c

5c Cost of transporting supplies to another Warehouse

Cost from Vendor Sam Adams to Warehouse1c

(0,0,78)

(0,0,26)

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Map of Attack Pattern

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Map of Attack Pattern

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Resilience Curves

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One Year Later…

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Management Philosophy 2

• TOP ONES 26 is looking into the previous years analysis.

• Ownership is NOT concerned about profit, only reputation. Willing to spend exorbitant amounts of cash to ship material directly from vendors to the bar.

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The “Al Capone” Solution

Armored Trucks at a bare minimum expense of $120,000!

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Assumptions/Set-Up

• Is a traditional Supply and Demand Model – demand values are negative for vendors, positive for bars.

• With armored trucks, arcs between vendors and bars are considered to be “off limits” to interdiction.

• Ownership invests in Armored trucks, at $120,000 a piece. Estimate that over a one year span, will cost $5 per mile to run routes.

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1 Attacks

• Attack arc from Warehouse Texas to Bar Los Angeles, reduced profit of $142K

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2 Attacks

• Attack arcs from Warehouse Texas to Bar Los Angeles and Bar Las Vegas

• Reduction in profit of $266K

3 Attacks

• Attack arcs from all three warehouses to Los Angeles, • Reduction in profit of $1.62M

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4 Attacks

• Attack arcs from Bar Las Vegas to all three warehouses.• Attack arc from Bar Los Angeles to Warehouse Texas• Reduction in profit of $1.74M

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5 Attacks

• Attack arc from Bar Los Angeles to Warehouse Georgia• Attack arc from Bar Las Vegas to Warehouse Texas• Attack arcs from Bar Tampa to all three warehouses• Reduction in profit of $1.90M

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6 Attacks

• Attack arcs from Bar Los Angeles to all three warehouses.• Attack arcs from Bar Las Vegas to all three warehouses.• Reduction in profit of $3.22M

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Operator Resilience Curve

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 310

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000Recognizable pattern emerges – dramatic increases in costs every third attack followed by a period of nearly cost increases in cost.

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Further Work/Conclusion• Allow bars to trade merchandise. Will

dramatically increase robustness of network.• Determine optimal location of Warehouses, as

current location was selected arbitrarily. Are more needed? Less?

• Create back up stores of material

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Questions

I don’t always surf the web, but when I do I go

toneddimitrov.org/

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Back-up Slides

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Multi-Commodity Flow Formulation

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Resilience Curves

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Gams Implementation of Model

2c 3c 4c

Profit made through warehouse supply chainCost from purchasing straight from vendorProfit from purchasing straight from vendor

1( ,0,3)c2( ,0, 26)c

(0,0,78)

(0,0, )

3( ,0,1)c

4( ,0,13)c

(0,0,104)5( ,0,100)c

5c Cost of transporting supplies to another Warehouse

Cost from Vendor Sam Adams to Warehouse1c

(0,0,78)