Modelling of Baltic supply chain for consumer goods

Abstract

The current economic crisis has emphasised the importance of efficient operation of the Baltic distribution network for consumer goods. To a large extent, it concerns beverages, i.e. goods characterised by the fast cargo turnover, high competition and low margins. In this article, the impact of crisis on volumes and sales prices is analysed, and the influence of quantity and location of production factories and distribution centres on costs of Fast Moving Consumer Goods is studied. Baltic Supply Chain logistics model is developed, with one producing plant and one distribution centre per Baltic country. The relevant mathematical model is based on the mixed integer linear programming method. The results of calculations based on the developed model are in line with practice of the large international company dealing with beverages in the Baltics. In the research, operational parameters for optimal Baltic Supply Chain configuration have been evaluated and possibilities for more detailed modelling considered. The findings could be useful for Supply Chain Management of other consumer goods.