08-Distribution Strategies_en_a2b.pdf - -1 OMIT Location of a single warehouse demand \u00a9 HEC Paris \u2013 Operations Management and Information

08-Distribution Strategies_en_a2b.pdf - -1 OMIT Location of...

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- 1 - 4/14/10 OMIT © HEC Paris – Operations Management and Information Technology Location of a single warehouse demand
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- 2 - 4/14/10 OMIT © HEC Paris – Operations Management and Information Technology Location of a single warehouse Aim : find the location that minimizes the distribution costs Cost of transport from the warehouse to the customer: Total Cost = A (fixed) + B ($/mile) x d (distance) Minimize Σ (TC i x Q i ) Minimize Σ (d i x Q i ) The center of gravity method distances calculated as the ‘crow flies’ (rectilinear) coordinates of the center of gravity: CAREFUL: Transportation cost only one aspect; other issues to consider: Labor costs (warehousing requires a lot of handling!)
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  • Fall '19
  • distribution costs, HEC Paris

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