• BREAK EVEN IS ACHIEVED AT 40 HOUSEHOLDS PER WEEK (1.7% of all households in Iqaluit) • Food item prices were set to the unit cost of 40 households purchasing per week • Profit is expected to grow up to 8.7% of total revenue HOW IS FOOD TRANSPORTED NOW? Traditional Retail The price of food is affected by warehousing, store overhead and spoilage Online Retail The price of food is affected by the cost of a surrogate consumer and shipping in small quantities NUNAVUT • Composed of 25 fly-in communities, spread out across 2 million square km (Government of Nunavut) • Population of 36,687 (Government of Nunavut) FOOD INSECURITY is the state of being without reliable access to a sufficient quantity of affordable, nutritious food (WHO) and is caused by: People in NUNAVUT, CAN spend on average $7770.63 more on groceries per year than the National average (Stats Canada). 45.2% of the population is identified as being FOOD INSECURE SOLVING THE PROBLEM THE IMPACT Parameters : Cost to purchase food product from vendor ($ per kg) : Cost to ship to port using shipment company ($ per kg, km) : Cost to ship to Iqaluit using shipping company ($ per kg) : Distance from vendor to port (km) : Demand for product (kg) Decision Variables : The amount of food product purchased from vendor (kg) : The amount transported from vendor using shipping company to port (kg) : The amount transported from port to Iqaluit using shipping company (kg) Destination Shipping Company ( ) Shipping Company ( ) Vendor ( ) Consolidated Order 1 2 3 REFERENECES • Fmi.org, 'FMI | Food Marketing Institute | Supermarket Facts', 2015. [online]. Available: http://www.fmi.org/research-resources/supermarket-facts. [Accessed: 15- Mar- 2015]. • Gov.nu.ca, (2014). Nunavut FAQs | Government of Nunavut. [online] Available at: http://www.gov.nu.ca/eia/information/nunavut-faqs [Accessed 6 Jun. 2014]. • Inspection.gc.ca, (2014). Acts and Regulations - About the Canadian Food Inspection Agency - Canadian Food Inspection Agency. [online] Available at: http://www.inspection.gc.ca/about-the-cfia/acts-and-regulations/eng/1299846777345/1299847442232 [Accessed 4 Mar. 2015]. • Stats.gov.nu.ca, (2015). [online] Available at: http://www.stats.gov.nu.ca/en/home.aspx [Accessed 26 Feb. 2015]. • Www12.statcan.ca, (2015). [online] Aboriginal Population Profile from the 2006 Census, Statistics Canada - Province/Territory. [online] Available at: http://www12.statcan.ca/census-recensement/2006/dp-pd/prof/92- 594/details/Page.cfm?Lang=E&Geo1=PR&Code1=62&Geo2=PR&Code2=01&Data=Count&SearchText=Nunavut&SearchType=Begins&SearchPR=01&B1=All&Custom= [Accessed 28 Feb. 2015]. • Www12.statcan.gc.ca, 'National Household Survey (NHS) Profile, 2011', 2015. [online]. Available: http://www12.statcan.gc.ca/nhs-enm/2011/dp- pd/prof/details/page.cfm?Lang=E&Geo1=CSD&Code1=6204003&Data=Count&SearchText=Iqaluit&SearchType=Begins&SearchPR=01&A1=All&B1=All&GeoLevel=PR&G eoCode=6204003&TABID=1. [Accessed: 16- Mar- 2015]. • Who.int, 'WHO | Food Security', 2015. [Online]. Available: http://www.who.int/trade/glossary/story028/en/. [Accessed: 05- Mar- 2015]. • V. Tarasuk, A. Mitchell and N. Dachner, Household Food Insecurity in Canada 2012, 1st ed. Toronto: PROOF, 2015, p. 2. Advisors: Prof. S. Dimitrov, Prof. J. H. Bookbinder Team 2: Mohamed-Akeel Hasham, Andrew Scott, Ian Gresel, Jordan Moreau Feeding Iqaluit: A Consolidated Shipment Ordering System PROBLEM Retail Store Consumer Surrogate Consumer Order Packaging Shipping Warehouse Producers Inbound Logistics Distribution Center Outbound Logistics Retail Store Consumer SIMULATION TO VERIFY IMPACT ASSESSING PERFORMANCE FORMULATION (Multi-Commodity Network Flow Problem with Quantity Discount) OBJECTIVE: Minimize Food PROCUREMENT and SHIPPING costs = = 1.6 trips per week = $ = $30.67 $3.22 = 9 (s/person/week) = 14.4 Expected Items Purchased Per Week (Poisson Distribution) IQALUIT OTTAWA 20.4% 17.1% 12.7% 11.5% 12.5% 12.1% 11.7% 13.5% 13.4% 16.2% 17.5% 15.6% 45.2% Food Insecurity in Canada (Household Food Insecurity in Canada 2012) PROJECT GOAL Develop a system that improves food AFFORDABILITY in Iqaluit, Nunavut (Iqaluit was chosen to limit scope) PROJECT OBJECTIVE Create a system that can profitably offer food to residents of Iqaluit at a lower cost than currently available in a competitive amount of time Orders are accepted from customers and prepared for consolidation Once the ordering time has expired, an order is placed to vendors to satisfy all customer orders Vendor orders are shipped to a port via truck where they are consolidated for shipping to a destination The consolidated order is shipped to the destination via plane At the destination shipment is separated into individual orders for pickup by their respective consignee ACCEPT ORDER CONSOLIDATE SHIP SEPARATE =1 + =1 =1 =1 + =1 =1 − =1 ≤0 ∀ =1 − =1 =1 ≤0∀ =1 =1 − =1 ≤0 ∀ Demand Constraint Vendor – Courier – Port Flow Balance Port- Iqaluit Flow Balance Subject to Food Procurement Cost Shipping Cost to Port Shipping Cost to Destination 1 2 3 INPUTS RESULTS 64% Up to 64% savings on an individual item 13% Savings Per Food Basket 13% OTHER CONSIDERATIONS Ensuring Food Safety -20% -18% -15% -13% -10% -8% -5% -3% 0% 3% 5% 8% 10% 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 22000 24000 0 50 100 150 200 250 300 % Profit Dollars ($) Number of Households Ordering Per Week Revenue vs. Expenses Expenses Revenue % Profit First order point with positive profit Profitability is logarithmic. Growth of profits decreases as more households place orders a week IMPROVED HEALTH Accessibility and affordability of nutritious foods reduces risk factors for chronic disease and obesity IMPROVED AVAILABILITY Access to nutritious food contributes to a healthy diet Grocery 34% Dairy 27% Produce 27% Frozen Foods 12% Grocery Purchasing Habits by Category 31 Item Food Basket 31 60 65 70 75 80 85 90 95 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 280 290 Cost Per Order ($) Number of Households Ordering Per Week Average Cost Per Order vs Number of Households Ordering Per Week Retail Store Cost Per Order Northern Shopper Cost Per Order Feeding Iqaluit Break Even Cost Per Order Feeding Iqaluit’s average cost per order is less than the retail store average cost per order at 10 households with 95% confidence PROBLEM All results are based on real data collected from the following companies: At 40 households, Feeding Iqaluit’s average cost per order is 2.1% less than purchasing from Northern Shopper, and 15.75% less than the retail store average cost per order with 95% confidence INCREASED COMPETITION Leads to lower food prices and improved AFFORDABILITY 1 week customer ordering period