8. Baselines and Optimal Baselines
Up to this point, we have compared the results of our optimization run to other optimization runs. However, the goal of most network design projects is to improve an existing supply chain. For example, when you are presenting your results, you may be asked how much money is saved with the new design or how much the service improves. To answer these questions, you need a baseline. A baseline is a model of the existing network.
Equally important, you will also be asked a deeper question: How do you know that your model is valid? The baseline model can solve that problem as well.
It turns out that there are two main baseline models you will want to consider. Each provides its own set of insights. We will call the ...