FMCG Procurement-Distribution Integrated Cost Optimization

In recent years, fast moving consumer goods (FMCG) industry has been developing rapidly, and the size of market demand has been increasing greatly. FMCG is characterized of short consumption cycle, large quantity of demand, lower value per product. Cost control, especially in the stage of the distribution channel is essential to improve the operational efficiency.This thesis firstly reviewed the relevant research literature on fast moving consumer goods systematically, researched the cost control problem of FMCG integrated procurement-delivery under the internal market, established two FMCG procurement-delivery cost optimization models:the first model is about one product with no time window of delivery, the second model is about multi-products with time window of delivery. The former model mainly tackles the procurement strategy, with one product and without time window; the latter model mainly studies the distribution strategy of multi-products with time window. Both have the objectives of minimizing the cost of purchasing and distribution. The above models are applied to an international beverage company. There are two types of vehicle available for some terminal warehouses are only suited to small vehicles limited by their unloading space. Both models are calculated by genetic algorithms with the data from the sample company, and received a satisfactory procurement plan and distribution solutions including distribution path. The results showed that:joint procurement strategy could take full advantage of vendor discounts for reducing total costs. Product categories, time window for procurement and the time limit of orders are very factors that impact the development of procurement-delivery plan.