Network Planning and Facility Location Flashcards
Main issues of network planning
Pick optimal number, location, size of plans/warehouses
Determine optimal sourcing strategy
Determine best distribution channels
Three steps of planning
Network design, inventory positioning, resource allocation
Network design
What is made and how these are distributed. Physical configuration of supply chain
Strategic
Inventory positioning
Where to position inventory to achieve benefits of both a push strategy and a pull strategy
Strategic or tactical
Resource allocation
Are goods located in the right place and are traded/allocated properly? Assigning right products to right production facilities
Tactical
Tools for making strategic decisions
Exact algorithms - optimal solutions
Heuristics - good solutions
Simulation models - only evaluation
Factors for deciding optimal location of facilities
Geographic conditions and infra
Natural resources and labour availability
Local industry and tax laws
Pull strategy
High variability low volume goods in central warehouse
Push strategy
Low variability high volume goods in decentralised warehouses
Five quantitative methods for optimal location
- Factor rating analysis
- Economic analysis
- Hybrid analysis
- Load distance analysis
- Median location
- Centre of gravity - Transportation method
Factor rating analysis
Weights and scores. Multiply and then add up weighted scores
Economic analysis
Total costs and break even analysis
Hybrid analysis
CFM, OFM, SFM => LM
Load distance analysis
Median location analysis
Sort by coordinates, then total/2
Centre of gravity
Formula
Transportation method
How many products to produce in each facility based on constraints and demand. Intuitive and corrections
