Major US retailer saves $500,000 annually by simulating investment decisions to minimize risks and reduce costs

For retailers to survive in these tough economic times they need to get smarter with what they have and use simulation to maximize efficiency, reduce costs and deliver the best possible customer experience.

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We take a look at a major US retailer who uses simulation for almost every important decision within the organization and the impact it has on the business.

Key Results

  • Save $500,000 annually in cost avoidance of not   purchasing and installing excess equipment
  • Minimize costs while maintaining service levels
  • Experiment with investment decisions to find best fit   for each store
  • Evaluate the impact of process changes

Evidence Based Decisions

A major retail organization in the United States consisting of convenience and petroleum stores, uses SIMUL8 software to simulate almost every process in it’s operation.

With a strong focus on the customer, the retailer aims for specific levels of service throughout the organization, so it’s important that every decision made is right first time. SIMUL8 is used on a daily basis to give management the evidence they need to be confident that the decisions they make are the right ones.

Cost Avoidance

When a store holder requests an investment of any kind (equipment, staff etc) a simulation of the store is created to test the impact of the investment. This allows the retailer to experiment with different scenarios to find the best fit for each store without the risk of putting any investment in place.

The simulations consider a number of variables linked to customer satisfaction including demand, customer arrival rates, equipment utilization, customer service levels, and the profit that can be gained from each investment.

This approach saves the retailer $500,000 annually in cost avoidance of not purchasing and installing excess equipment and has resulted in improved levels of customer service.

The versatility of SIMUL8 software ensures it will continue to be used as a key part of upcoming projects within the retailer from equipment investment to minimizing customer queuing times.

   

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