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Logistics Network Configuration Outline What is it? Methodology Modeling Data Aggregation Validation Solution Techniques. The Logistics Network The Logistics Network consists of: Facilities:Vendors, Manufacturing Centers, Warehouse/ Distribution Centers, and Customers Raw materials and finished products that flow between the facilities. Logistics Design Decisions Determine the appropriate number of warehouses Determine the location of each warehouse Determine the size of each warehouse Allocate space for products in each warehouse Determine which products customers will receive from each warehouse Decision Classifications Strategic Planning: Decisions that typically involve major capital investments and have a long term effect 1. Determination of the number, location and size of new plants, distribution centers and warehouses 2. Acquisition of new production equipment and the design of working centers within each plant 3. Design of transportation facilities, communications equipment, data processing means, etc. Decision Classifications Tactical Planning: Effective allocation of manufacturing and distribution resources over a period of several months 1. Work-force size 2. Inventory policies 3. Definition of the distribution channels 4. Selection of transportation and trans-shipment alternatives Decision Classifications Operational Control: Includes day-to-day operational decisions 1. The assignment of customer orders to individual machines 2. Dispatching, expediting and processing orders 3. Vehicle scheduling Network Design: Key Issues Pick the optimal number, location, and size of warehouses and/or plants Determine optimal sourcing strategy Which plant/vendor should produce which product Determine best distribution channels Which warehouses should service which customers Objective of Logistics Management Design or configure the logistics network so as to minimize annual system-wide cost subject to a variety of service level requirements Network De
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