Mini supermarkets

A news item at the weekend told that one of the big four UK supermarkets has opened a small city centre store for the first time. Morrisons were joining others (Tesco & Sainsbury and Co-operative) who have both large out-of-town stores and basic outlets in city centres.

The story claimed that the decision had been taken because of the recession, affecting the number of people who shop out-of-town. But the other stores know that there are different clienteles for different types of shop, so there is almost certainly an underlying decision to try and reach the clientele who shop regularly in their city centres. Maybe the recession drew the management's attention to the need to do this?

I don't know how many O.R. scientists work at Morrisons. But I hope that any who are there have read about a study that one of the others commissioned, which led to a change in the way that it handled distribution to its city-centre shops. The study showed that the principles of distribution were significantly different to such stores, compared with the model that was used for out-of-town stores. The O.R. person involved spent three months travelling in the cabs to observe what actually happened, which was not what the staff in head office thought happened. And as numerous O.R. studies have shown, it is always important for the O.R. staff to get involved on the front line, or sharp end.

Marmalade, seasonality, production planning

It's the middle of January, and this is the time of year to buy Seville oranges. And to make real "English" marmalade, you must have Seville oranges. However, these oranges are only available for a few weeks, from early January to early February. Commercial producers can preserve the fruit and spread the production over the rest of the year, but amateurs have a short window for home production. It is seasonality, but seasonality of supply of raw material, not seasonality of demand.

So yesterday and today we have been making marmalade. Just over 20 pounds of it. (This is one product in the kitchen which we measure in pounds, not in the metric way, because the glass jars we use are "one pound jars" or "12 ounce jars" even though they are labelled 454 grammes, or 340 grammes.) This was two batches in our large jam pan, and my forecast is that it will last us until early 2012. Forecasting demand for twelve months is not generally advisable in industry or commerce, but in our case we know that the rate we use it is about 20 to 24 pounds per year, and we buy a little each year to add variety to the diet, to support charities who sell home-made marmalade, to try other flavours, and because my family know that a jar of "interesting marmalade" will be a welcome present for birthday or Christmas. Given all this, our actual demand for our own marmalade is less than 20 pounds per year, so next year will probably be a "one batch" January. So here is a matter of "make-to-stock" production planning!

The basic recipe can be varied in many ways; extra fruit can be added, in which case the quantity of sugar needs to be increased. This year, for the first time, we have added some fresh pomelo.

Who would have thought that something so mundane could illustrate facets of operational research.

Here's the recipe for a basic batch, which we keep written in one of the cookbooks on an old 80 column punched card!

3lb Seville oranges
2 lemons
5.25 pints water
6lb sugar, which may be mixed granualted and demarara
0.5oz margarine or butter

1: peel the fruit and cut the peel into slivers of the size you like (ours are about 2cm by 2mm [it is easier to give small sizes in metric units])
2: put the peel into 2.25 pints of water and simmer gently for 90 to 120 minutes
3: chop the peeled fruit roughly (we either quarter the fruit or cut it into 4 or 5 slices) and put it all as pith in a large jam pan with 3 pints of water and simmer alongside the peel
4: Drain the pith into a bowl or pan through a colander, and scrape the pith through the colander as well, to give "body" to the marmalade.
5: unless you have two jam pans, now you need to wash the jam pan
6: add the drained liquid from the bowl to the jam pan, add the peel and its liquid, add the sugar and boil steadily ("rolling boil") until a test shows that it has reached setting temperature. (We take a small amount, put it on a saucer, cool it in the freezer for 30 seconds and then see if it wrinkles. Other methods exist.)
7: remove from heat, add the margarine/butter and stir to remove the scum on the liquid. Leave to cool for 6-10 minutes
8: meanwhile, wash your jars, and place in a cool oven to dry and sterilize at about 100 deg C,
9: Carefully fill each jar, and finish off as usual for home-made preserves.

Supply chain benefits

Over the last few years, O.R. professionals have given a great deal of attention to supply chains and their behaviour. O.R. people have improved JIT systems, developed algorithms for distribution of goods, and much else. In Saturday's Indepenedent newspaper (27/Nov/2010, page 55) there was an amusing story of the consequences of improving supply chains.

The story reads: "The John Lewis quest for worldwide domination continues with another new initiative designed to ensure shoppers never leave their department stores. Retail Week reports that supply chain improvements have reduced the amount of space John Lewis needs for stockrooms these days, so it plans to turn some of them into beauty spas and hairdressers. It's even promising to install theatrical stages in some of its cafes so you can be entertained while taking a break from spending your money."

Retail Week had the original story in its issue dated 26th November.

The lesson for O.R. models of supply chains is that they need to consider what happens to storeroom space when the needs for buffer stock is reduced. These aspects of the system may not appear automatically in the supply chain model ... but evidently they should!

Perception of value

The Commissioner for Victims of Crime Louise Casey has called for the right to trial by jury to be stopped for everything other than major crimes such as rape and murder. Casey said: "Defendants should not have the right to choose to be tried by a jury over something such as the theft of a bicycle or stealing from a parking meter."

How valuable is a bicycle? Louise Casey obviously thinks that they are cheap, that cycle crime is minor and trivial. But, has she bought a bike recently? Bikes cost a lot more than the money you can get out of a parking meter, with many worth over £1000, more than some cars. Moreover, organised criminal gangs are responsible for stealing thousands of pounds worth of bikes: for their victims, this is not a trivial matter. According to the British Crime Survey, 480,000 bikes are stolen every year.

(Some of the above has come from the Cyclist's Touring Club (www.ctc.org.uk)). For O.R. scientists, her misconception is a warning; make sure that everyone knows (or agrees) the real value of items in your studies. The classic area is placing a value on the cost of inventory. How much does it cost to store one widget for one time period?

Rabbit hole day, part 2

In one of our undergraduate modules we taught ideas of inventory control, both the theory and discussion of the practice. Naturally we looked at ABC analysis, the EOQ, Wagner-Whitin and problems with constraints. Then in exercises, we asked the students to think what practical obstacles there might be in applying the models. One question asked: "How may inventory models be used by small shop-keepers?", expecting a discussion about record keeping, the cost-benefit of having some kinds of records. Instead:

The first question to be answered is what we mean by "small". Given that the mean height of males in the UK is about 5ft 8in, with standard deviation 2.5in, "small" can be taken as males whose height is below 5ft 3in. Such people need assistance to reach high shelves, and Health and Safety legislation means that they must use ladders. Therefore we recommend that small shop-keepers arrange their shelving so that those items which are A or B are kept on low shelves, and C items are kept higher up.

And so it went on ....