Transportation Case – Abc Locker Delivery: Experience Convenience

Question 1:

This question was solved using the techniques of linear optimization. This is a transportation Problem.

The linear optimization model was created to minimize the costs shipment.

The answers are as shown as in the table below. The optimization model has been explained following the answer. Detailed calculations are enclosed in appendix 1.

CarrierPostal Code

Shipment Option

No. of Packages

Total Cost

Base 1xx Standard 875 67074.88Ease 2xx Standard 764 48439.89Base 3xx Standard 803 104249.5Case 4xx Standard 789 53358.49Dase 5xx Standard 769 54582.08Base 1xx Premium 775 96485.18Base 2xx Premium 789 113329.6Base 3xx Premium 803 152910.5Chase 4xx Premium 827 123538.9Dase 5xx Premium 806 123293

Linear Optimization Model

Objective :

To find out the best courier for each zip code ( split by standard and premium service) keeping the total costs of shipment minimum.

Constraint :

Total demand at each of the Pin Code.

Team – Kainomoto/Members: Eesha Chaturvedi, Mohit Monga, Ranjiv Ravi Page 1Indian School of Business

Question 2:

The Parameters are chosen considering consumer convenience, ease of collection, and profitability to Abc.

Revenue: as the costs will have to be such that the operations are profitable. Rental Cost, Ship Charge: Ensures the most cost effective places are selected so that the

savings can be passed on to the customer. The key to providing a low price product is to work on low cost structures.

Ship to deliver: Ensures the consumer gets the product on time and concessions are minimized.

Location hours: ensures the customers can collect at a time most convenient to them.

Question 3:

Two most important factors affecting the adoption rate negatively are mentioned below. The detailed analysis supporting these is enclosed in appendix 2 under the tab Final analysis.

1) The variability of the locker opening times across the week: The lockers that were open at different times at different days in the week showed a much greater percentage of less than 1% and between 1-5% adoption, as indicated in Figure 1 below. This shows that lockers that operate 24 hours a day, and the lockers that operate on fixed times everyday of the week seem to be doing better.

Team – Kainomoto/Members: Eesha Chaturvedi, Mohit Monga, Ranjiv Ravi Page 2Indian School of Business

Parameter RankRevenue 1Rental Cost 2Ship to Deliver 3Location hours 4Ship Charge 5

2) Customer returns: The lockers where the adoption was less than 1% and between 1-5%

showed the maximum customer returns. The numbers are as shown in the table below.

Team – Kainomoto/Members: Eesha Chaturvedi, Mohit Monga, Ranjiv Ravi Page 3Indian School of Business