First Key undertook a distribution modeling study to evaluate shifting production of beer products from an existing network of breweries to another network of breweries in different locations. A distribution model was developed that assigned beer production to each source location; as well as the shipment volume to each customer from the assigned source location. This provided the relative difference in freight costs (based on rate and distance from the source to the customer assignment) between the present shipping/sourcing pattern and the future state pattern. By modeling different scenarios, an optimal sourcing model for the future state breweries was provided.
