Chapter 7 - Agenda Assignment Network Design and Facility...

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1 1 Agenda Assignment Network Design and Facility Location (Chapter 7) 2 Network Design and Facility Location Chapter 7
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2 3 Chapter 7 Learning Objectives Identify factors that may suggest a need to redesign a logistics network. Structure an effective process for logistics network design. Be aware of key locational determinants and the impact they may have on prospective locational alternates. Understand the different types of modeling approaches that may be used to gain insight into logistics network design and facility location. Apply the simple “grid” or center-of-gravity approach to facility location. Have knowledge of certain ways in which transportation and transportation costs affect the location decision. 4 Strategic Aspects of Logistics Network Design Types of change in the business environment that affect logistics and supply chain management are: customer service requirements • locations of customers and/or supply markets corporate ownership • cost pressures • competitive capabilities organizational change
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3 5 Process of Logistics Network Design The key steps in determining the design of a firm’s logistics network are: 1. Define the logistics network design process 2. Perform a logistics audit 3. Examine the logistics network alternatives 4. Conduct a facility location analysis 5. Make decisions regarding network and facility location 6. Develop an implementation plan 6 Locational Determinants Attributes to be considered in site selection include: • labor climate transportation availability • proximity to markets and customers quality of life taxes and incentives • supplier networks • land, utilities, etc. • region or area preference
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4 7 How Many Locations? An approach to reduce costs associated with logistics networks is to consolidate inventories into fewer locations. • consolidating locations reduces
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Chapter 7 - Agenda Assignment Network Design and Facility...

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