Designing Large-Scale Supply-Chain Linear Programs in Spreadsheets
Communications of the ACM 50(8), 59-64 (2007)
14 Pages Posted: 1 Feb 2008 Last revised: 23 Nov 2012
Date Written: October 2, 2012
Abstract A supply chain is a network of facilities for activities such as raw materials procurement, finished goods manufacturing, and distribution of products to customers. Because of competitive pressures, many organizations have expanded their supply chains to include international sites for cheaper production and/or increased sales. The result has been increasingly complex supply chain management problems. One approach to dealing with such complexities is the use of a linear program (LP), a type of optimization model for applications such as minimizing costs or maximizing profits. Unfortunately, in the past LPs were explained in algebraic terms, which was confusing to many non-specialists. Recently, however, the awareness of LPs by non-technical senior managers has greatly increased because they can be explained more intuitively using spreadsheets. Given the advent of spreadsheets for LP, more managers are approving the use of the now-familiar linear programming approach for minimizing supply chain costs. As a result, supply chain LP models have become one of the most common LPs being solved.
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