Network redesign in Turkey: The supply, production, and distribution of malt and beer

Abstract

In this chapter, we consider a network redesign problem that contains decision problems of opening new malt plants and breweries in order to increase the malt and beer production capacities of a Turkish corporation, Efes Beverage Group. We briefly discuss several beer logistics applications in Turkey and other countries, and some location applications in Turkey. Some attention is also given to the overall status of logistics in Turkey. We construct a mixed integer programming model for the multi-period, multi-item, multi-level capacitated facility location/relocation problem of Efes. The model determines the locations of new malt plants and breweries as well as the distribution decisions for barley, malt, and different types of beer while minimizing fixed costs and annual transportation costs. We suggest a procedure to set effective capacities of breweries due to seasonality of demand. We solve the model under different parameter settings in order to obtain a variety of solutions that the decision makers may find useful. We discuss our results and experiences from this application process.