Urban Last-Mile Distribution of Paper Products in Latin America: Network Design and Customer Footprint

The goal of this research project is to build on previous research of the MIT Megacity Logistics Lab (MLL) in the field of urban last-mile distribution network design to develop a large-scale network optimization model for the urban distribution of paper products and to apply it to CMPC’s last-mile distribution operations in Santiago de Chile.

In particular, the network design model we intend to develop will be able to address the following questions related to CMPC’S last-mile operational footprint:

Distribution facilities
- How many distribution facilities of which kind (Distribution Centers, Transshipment Points, etc.) should be used to serve the urban market under consideration?
- Where should these facilities be located within the city?
- What should be their size and capacity?

Service areas / route territories
- Which part of the city should be served from which distribution facility?
- Which customers should be assigned to which route territory?
- On which day(s) of the week should which territory be served?

Delivery models
- Which part of the city and which group of customers should be served with which delivery vehicle type and which crew setup on the vehicle?
- Which customer groups should be served with which service model for sales and delivery and at which frequency?

The model to be developed will be optimizing the operational footprint for cost (cost minimization), while respecting certain constraints and minimum requirements with regards to market reach and service level.