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The Coca-Cola Company. Develops products Produces the advertising and programs to support those products, and Sells syrup concentrate to Coca-Cola Enterprises and other bottlers, etc. Coca Cola Enterprises.

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the coca cola company
The Coca-Cola Company
  • Develops products
  • Produces the advertising and programs to support those products, and
  • Sells syrup concentrate to Coca-Cola Enterprises and other bottlers, etc.
coca cola enterprises
Coca Cola Enterprises
  • Combines the product concentrate with other ingredients to manufacture and package our beverages.
  • Markets and distributes products to retail customers and consumers.
coca cola enterprises3
Coca Cola Enterprises
  • The largest soft-drink bottler in the world,
  • The Coca Cola Company owns 42 % of the outstanding common stock of Coca-Cola Enterprises
  • Net concentrate/syrup sales to Coca-Cola Enterprises were $3.1 billion in 1998 or approximately 16 % of sales.
  • 3.8 billion unit cases in 1998
  • Net operating revenues of $13.4 billion
  • EBITDA $1.989 billion
full service business
Full Service Business
  • CCE’s vending machine operations
    • Owns and operates approximately 200,000 vending machines in the US
  • North Metro Atlanta Sales Center
    • approximately 2,000 machines
    • approximately 8 drivers
    • area covering 190 sq. miles
vending machines
Vending Machines
  • Support 4 to 12 flavors
  • Hold 8 to 12 columns of cans
  • 30 cans per column
our example
Our Example
  • 5 Flavors
  • 10 columns
  • Customer service -- in-stock probability for all flavors 99%
issues
Issues
  • Which flavors do we stock?
  • How many columns do we stock for each flavor?
  • How often to we restock the machine?
  • How do we build driver routes?
  • How many drivers and trucks do we need?
other related questions
Other related questions
  • Can we make some of these problems go away?
  • Vending machine design
    • Size
    • Flexibility
    • Number of flavors
current operations
Current Operations
  • Machine put on 7, 14, 21, … day schedule based on volume
  • Drivers assigned routes to cover machines
  • Missed machines rolled over to next day
  • Driver allocates columns to flavors and fills
  • Drive pay partly based on cases loaded
  • Company prescribes some flavors
    • Core flavors and new flavors
which flavors do we stock
Which flavors do we stock?
  • What are the drivers?
    • Revenue
our set up
Our set up
  • Flavors we must carry
    • Coke
    • Diet Coke
    • Sprite
  • Other flavors we’ll consider
    • Caffeine free diet coke
    • Minute Maid
    • Nestea
maximize revenue
Maximize Revenue
  • What flavors?
a better model
A better model?
  • Customer profiles
    • Diet anything
    • Any variety of Coke
    • “Healthy”
  • Fraction of all customers fitting profile
  • Choose flavors that satisfy the greatest fraction of the population
how many columns
How many columns?
  • We have chosen flavors
  • We know expected sales rates (possibly based on what else is in the machine)
  • We stock so that...
the bottleneck
The Bottleneck
  • First run out of some flavor as late as possible
how often to restock
How often to restock?
  • What are the issues?
service level
Service Level

Poisson CDF: Probability of at most Stock Level arrivals

in Restock Interval days