Feasibility study for the implementation of a logistics network for distribution of dry food to low income people

This study explores the feasibility of reducing the purchasing costs of dry food by improving current logistic channels and aggregating demand. The value proposition is to reduce the purchase cost of dry food by 20% by setting up a logistic model to connect end customers with food manufacturers through a central coordination operation. This coordination unit will manage supply and demand using the Internet and a "cross-docking" system. Chile was chosen to evaluate the feasibility of a pilot project to test the model, in particular the capital city of Santiago and southern regions of the country. Results show that the proposed model is economically and technically viable if located in regional areas outside Santiago where there is a high density of low-income communities and no large chains of supermarkets. The project's return on investment is 18.5%, based on a 5-year period, a 15% discount rate, and CH$87 million of initial investment. Results of the urban model for Santiago demonstrate that it is not economically feasible due to the low-density market potential and high supermarket penetration rate. The financial model for rural areas shows that, even though transportation costs are higher than in urban Santiago, it is economically feasible and only 26 sites are required to make the project break even, representing 9% market penetration.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2002

Author dc:creator

• Martinez, Raimundo, 1971-

Advisor dc:contributor.advisor

• Yossi Sheffi.

• Civil and Environmental Engineering.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/35491

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/35491