Development of a Rapid-Response Supply Chain at Caterpillar

As part of its growth strategy, Caterpillar Inc. plans to launch a new P2000 product line of \compact" construction equipment and work tools. In anticipation of this, they asked the authors to construct and analyze potential P2000 supply chain con gurations. Through the use of decomposition, and results from network ow theory, inventory theory, and simulation theory, we were able to provide a set of solutions to this problem, corresponding to di erent supply chain scenarios (provided by Caterpillar). Based on our recommendations, Caterpillar made their decision regarding the P2000 supply chain con guration. Subject classi cations: Professional: OR/MS Implementation. Inventory/Production: Applications. Industries: Machinery. Area of review: OR Practice.