LCDR Vikas Jasuja USN Capt. Roque Graciani USMC 1

Overview PURPOSE: Analyze Logistical Network of Top Ones 26 Background of Top Ones 26 Display abstract, specifically arcs, nodes Incorporate cost analysis into the model Model (GAMS) formulation Management philosophy 1 – assume ownership’s primary goal is profit Management philosophy 2 – ensure all products are stocked Conclusions Further Work 2

What is Top Ones 26? Founding Principles: Mission Statement: per Jamal Sampson “is to create an establishment satisfy the customer’s desire of alcoholic beverages of the highest quality, including micro- brews, craft beers, fine wines, and spirits produced in the United States of America and Canada” Is a bar for those who “know their drinks”, i.e beer, wine, and whiskey connoisseurs. Not a cookie cutter establishment! Variety is key, i.e. while Napa Valley is a power player in the wine industry only one wine will be represented at a time. 3

Beer Selection 4

5

BREWERIES Brewery Locations

7

Winery Locations

9

Distilleries

Top Ones 26 Bartenders 11

Top Ones 26 Bartenders 12

Top One’s 26 Bars 13

Top One’s 26 Bar Locations

Warehouse Locations 15

Top Ones 26 Logistical Means 16

Network Model Flow 17

Connecting Nodes and Edges 18

Shipping Lanes Example Sam Adams Brewery Dallas Warehouse Dallas Bar 19

Model Assumptions -Bars only have capacity for 26 shipments. -Trucks have 22 pallets of product capacity. -Prices for like commodities are equal. -Vendors are off limits to network attacks. -Transportation costs are constant. -60 cases of beer per pallet. -48 cases of wine per pallet cases of whiskey per pallet. 20

Cost and Profit Breakdown ProductPrice per Case Logistical Network Price per mile Profit Margin Scaling Factor Beer$30 TOP ONES$1.5050%10 Wine$150 Whiskey$150 IF OTHER LOGISTICAL NETWORK IS USED THERE IS A 20 PCT INCREASE IN COSTS AND SMALLER RETURN 21

Management Philosophy 1 -Unprotected network, no safe havens. -Using negative costs to drive model. -Profit first approach. -Attack and let’s see what happens… 22

Possible Attacks LIKELIHOOD 23

Min-Cost Multi-Commodity Flow GAMS/ CPLEX 26 Commodities 62 Nodes 2133 Edges Costs Capacities Revenue Streams Max-Profit Best Attacks Stocking Levels Network Insight 24

Gams Implementation of Model Profit made through warehouse supply chain Cost from purchasing straight from vendor Profit from purchasing straight from vendor Cost of transporting supplies to another Warehouse Cost from Vendor Sam Adams to Warehouse

Map of Attack Pattern 26

Map of Attack Pattern 27

Resilience Curves 28

One Year Later… 29

Management Philosophy 2 TOP ONES 26 is looking into the previous years analysis. Ownership is NOT concerned about profit, only reputation. Willing to spend exorbitant amounts of cash to ship material directly from vendors to the bar. 30

The “Al Capone” Solution Armored Trucks at a bare minimum expense of $120,000! 31

Assumptions/Set-Up Is a traditional Supply and Demand Model – demand values are negative for vendors, positive for bars. With armored trucks, arcs between vendors and bars are considered to be “off limits” to interdiction. Ownership invests in Armored trucks, at $120,000 a piece. Estimate that over a one year span, will cost $5 per mile to run routes. 32

1 Attacks Attack arc from Warehouse Texas to Bar Los Angeles, reduced profit of $142K 33

2 Attacks Attack arcs from Warehouse Texas to Bar Los Angeles and Bar Las Vegas Reduction in profit of $266K 34

3 Attacks Attack arcs from all three warehouses to Los Angeles, Reduction in profit of $1.62M

4 Attacks Attack arcs from Bar Las Vegas to all three warehouses. Attack arc from Bar Los Angeles to Warehouse Texas Reduction in profit of $1.74M 36

5 Attacks Attack arc from Bar Los Angeles to Warehouse Georgia Attack arc from Bar Las Vegas to Warehouse Texas Attack arcs from Bar Tampa to all three warehouses Reduction in profit of $1.90M 37

6 Attacks Attack arcs from Bar Los Angeles to all three warehouses. Attack arcs from Bar Las Vegas to all three warehouses. Reduction in profit of $3.22M 38

Operator Resilience Curve Recognizable pattern emerges – dramatic increases in costs every third attack followed by a period of nearly cost increases in cost. 39

Further Work/Conclusion Allow bars to trade merchandise. Will dramatically increase robustness of network. Determine optimal location of Warehouses, as current location was selected arbitrarily. Are more needed? Less? Create back up stores of material 40

Questions I don’t always surf the web, but when I do I go to neddimitrov.org/ 41

Back-up Slides 42

Multi-Commodity Flow Formulation 43

Resilience Curves 44

Gams Implementation of Model Profit made through warehouse supply chain Cost from purchasing straight from vendor Profit from purchasing straight from vendor Cost of transporting supplies to another Warehouse Cost from Vendor Sam Adams to Warehouse 45

Secure Our Warehouses and Bars 46