The Domino’s Pizza Supply Chain Case Study
The Domino’s supply chain and distribution system case study will be used as a means for teaching, improving, and refining your skills in the application of linear and integer optimization. Much of the details and data associated with this case study has been consolidated from publically available data. Where not available, some details have been assumed to define the problem and some detailed data have been created to be consistent with stated or assumed parameters.
In the conduct of this case study you will:
- Formulate, model, and solve large scale transportation and facility location problems using Integer Programming (IP),
- Gather required data by creating a web crawler and scraping web pages
- Transform data into usable information via Google, MapQuest, and/or Bing API’s
- Manage and manipulate large data sets and transform them into parameters used by your LP/IP formulation.This case study is laid out into seven sections:
Section 1: presents historical and contextual information about Pizza.
Section 2: presents historical and contextual information about Domino’s Pizza
Section 3: describes the details on Domino’s stores and distribution centers are included.
Section 4: provides details concerning the flour, cheese, and tomato sauce suppliers
Section 5: describes the transportation system.
Section 6: provides the assumptions, restrictions, limitations (also known as constraints) that you will need to incorporate into your data gathering and model formulation.
Section 7: contains the list of problems you will be solving in this class with key data dispersed throughout the case study.
The Birth of Domino’s
In 1960, Tom Monaghan at the age of 23 purchased DomiNick’s Pizza in Ypsilanti, Michigan for $1,400 with his brother James. James did not wish to quit his job as a postman so eight months later Tom traded a used Volkswagen Beetle for James stake in the company. Tom expanded his business by purchasing two other pizzerias in Ypsilanti and in 1965 tried to rename all his stores to DomiNick’s to improve branding but was denied by the original owner. A delivery driver working for Tom suggested Domino’s and in 1965 Tom incorporated his business in Ann Arbor Charter Township Michigan [6].
In 1967 Domino’s Pizza began franchising with its first store outside of Michigan opening in 1968 and internationally in 1983. Domino’s opened its 200th store in 1978,its 1,000th store by 1983, and its 5,000th store in 1989. In 1998, Tom retired from Domino’s at the age of 61 selling 93% of the company to Bain Capital, Inc. for $1 billion [6, 7].
Today, Domino’s has 5,098 stores in the US and over 11,600 stores in over 75 countries. Of the 11,600 stores only 390 are owned by Domino’s with the rest owned by the more than 2,500 franchise owners worldwide. It is the largest pizza delivery company and the second largest pizza chain in the world [30].
