• 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 2million square km (Government of Nunavut)

• Population of 36,687 (Government of Nunavut)

FOOD INSECURITY is the state of being without reliableaccess to a sufficient quantity of affordable, nutritiousfood (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

𝑐𝑖𝑚: Cost to purchase food product 𝑚 from vendor 𝑖 ($ per kg)

𝑐𝑗: Cost to ship to port using shipment company 𝑗 ($ per kg, km)

𝑐𝑙: Cost to ship to Iqaluit using shipping company 𝑙 ($ per kg)

𝑇𝑖𝑘: Distance from vendor 𝑖 to port 𝑘 (km)

𝐷𝑚: Demand for product 𝑚 (kg)

Decision Variables

𝑥𝑖𝑚: The amount of food product 𝑚 purchased from vendor 𝑖 (kg)

𝑥𝑖𝑗𝑘: The amount transported from vendor 𝑖 using shipping company 𝑗 to port 𝑘 (kg)

𝑥𝑘𝑙: The amount transported from port 𝑘 to Iqaluit using shipping company 𝑙 (kg)

DestinationShipping Company(𝑗)

Shipping Company(𝑙)

Vendor (𝑖)

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 SystemPROBLEM

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

𝜆 = 𝐸 𝑋 = 1.6 trips per week

𝐸 𝑖𝑡𝑒𝑚𝑠 𝑝𝑒𝑟 𝑡𝑟𝑖𝑝 =$ 𝑝𝑒𝑟 𝑡𝑟𝑖𝑝

𝐴𝑣𝑔 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑖𝑡𝑒𝑚=$30.67

$3.22= 9 𝑖𝑡𝑒𝑚𝑠 𝑝𝑒𝑟 𝑡𝑟𝑖𝑝

𝐸(𝑖𝑡𝑒𝑚s/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 GOALDevelop a system that improves food AFFORDABILITY inIqaluit, Nunavut (Iqaluit was chosen to limit scope)

PROJECT OBJECTIVECreate a system that can profitably offer food to residents ofIqaluit at a lower cost than currently available in acompetitive 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

𝑀𝑖𝑛

𝑚=1

𝑀

𝑐𝑖𝑚𝑥𝑖𝑚 +

𝑘=1

𝐾

𝑖=1

𝐼

𝑗=1

𝐽

𝑐𝑗𝑇𝑖𝑘𝑥𝑖𝑗𝑘 +

𝑙=1

𝐿

𝑘=1

𝐾

𝑐𝑙𝑥𝑘𝑙

𝐷𝑚 −

𝑖=1

𝐼

𝑥𝑖𝑚 ≤ 0 ∀𝑚

𝑚=1

𝑀

𝑥𝑖𝑚 −

𝑗=1

𝐽

𝑘=1

𝐾

𝑥𝑖𝑗𝑘 ≤ 0 ∀ 𝑖

𝑖=1

𝐼

𝑗=1

𝐽

𝑥𝑖𝑗𝑘 −

𝑙=1

𝐿

𝑥𝑘𝑙 ≤ 0 ∀ 𝑘

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 item13% 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

% P

rofi

t

Do

llars

($

)

Number of Households Ordering Per Week

Revenue vs. Expenses

Expenses Revenue % Profit

First order point with positive profit

Profitability is logarithmic. Growth of profitsdecreases 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

Grocery34%

Dairy27%

Produce27%

Frozen Foods12%

Grocery Purchasing Habits by Category

31 Item Food Basket

312

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

Co

st P

er O

rder

($

)

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 orderis less than the retail store average costper 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’saverage cost per order is 2.1% less thanpurchasing from Northern Shopper, and15.75% less than the retail store averagecost per order with 95% confidence

INCREASED COMPETITION

Leads to lower food prices and

improved AFFORDABILITY

1 week customer ordering period