LOCATION
This chapter introduces the fundamental concepts and terms
of logistics network design and the steps involved in designing the network
design.
Importance of logistics network design
Location decisions involve determining the number, location
and size the facilities to be used.
Elements of change
- Changing customer service requirements
- Shifting locations of customer and/or supply markets
- Change in corporate ownership
- Cost pressures
- Competitive capabilities
- Corporate organizational change
Classification of location problems
- Driving force
- Number of facilities
- Discreteness of the choices
- The degree of data aggregation
- Time horizon
Major locational determinants
- Labour climate
- Availability of transportation
- Proximity to markets and customers
- Quality of life
- Taxes and industrial development incentives
- Supplier networks
- Lands costs and utilities
- Company preferences
Modelling approaches
·
Optimization models is based on precise
mathematical procedures
·
Simulation model involve developing a
computer representing of the logistics network
·
Heuristic model capable of reducing a
problem to a manageable size and search automatically.
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