Nu-kote's spreadsheet linear-programming models for optimizing transportation

Nu-kote International manufactures ink-jet, laser, and toner cartridges; ribbons; and thermal fax supplies. We developed spreadsheet linear-programming models for planning shipments of finished goods between vendors, manufacturing plants, warehouses, and customers to minimize overall cost subject to maximum-shipping-distance policies. Nu-kote used versions of these linear programs (LPs) to model supply chains with different warehouse configurations. The LPs have between 5,000 and 9,700 variables and 2,452 constraints. Nu-kote has used these LPs for an inherently nonlinear problem to identify improved shipments that will reduce annual costs by approximately $1 million and customer transit time by two days. It has already saved $425,000 from insight gained from the model.